Peso slips with PHL growth seen missing gov’t target
THE PESO slipped against the dollar on Tuesday on economic growth concerns and ahead of key US data to be released on Friday.
The local unit went down by 3.1 centavos to close at P58.521 against the greenback from its P58.49 finish on Monday, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s session flat at P58.49 to the dollar. Its weakest showing was at P58.54, while its intraday best was at P58.33 versus the greenback.
Dollars traded went up to $1.49 billion from $1.22 billion on Monday.
The local unit edged down after Economy Secretary Arsenio M. Balisacan said that Philippine gross domestic product (GDP) growth may not even reach the lower end of the government’s 5.5-6.5% full-year target due to the impact of the corruption scandal and adverse weather, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. If realized, 2025 would be the third straight year that the Philippines will miss its GDP growth goal.
The economy expanded by 4% in the third quarter, the slowest in over four years, bringing the nine-month average to 5%.
“The peso weakened amid expectations of a stronger US PCE (personal consumption expenditures) inflation data due to be released on Friday,” the first trader said in a Viber message.
Investors are now looking out for Wednesday’s November ADP employment report and Friday’s delayed September PCE Index, for clues on a Fed interest rate cut at the central bank’s meeting next week, Reuters reported.
Traders are pricing in an 87% chance of a December Fed rate cut, per CME’s FedWatch tool.
“The dollar-peso closed slightly higher due to geopolitical fears that attract dollar strength during Asian time amid rising oil prices. (There are) growing geopolitical fears after the drone strike damaged infrastructure of the Black Sea Terminal,” the second trader said in a phone interview.
For Wednesday, the first trader sees the peso moving between P58.40 and P58.65 per dollar, while the second trader expects it to range from P58.30 to P58.60. Mr. Ricafort said the peso could trade from P58.40 to P58.65. — A.R.A. Inosante
