THE PESO may move sideways the coming days following upbeat US labor and non-manufacturing data released last week.

On Friday, the local currency closed at P51.21 against the greenback, 21 centavos stronger than the P51.42-per-dollar finish on Thursday.

Last week’s close was also stronger than the peso’s P51.76-per-dollar finish last Oct. 27.

Traders said over the weekend that the sideways movement of the peso will be driven by overseas fundamentals as US non-farm payrolls recovered.

“The dollar might move sideways this week, with a slightly upward bias, as investors might divert their attention back to the possibility of another US interest rate hike in December 2017 following last Friday’s generally upbeat US reports on labor and non-manufacturing,” Guian Angelo S. Dumalagan, market analyst of Land Bank of the Philippines (Landbank), said in an e-mail.

US job growth accelerated in October after hurricane-related disruptions in the prior month, but wages grew at their slowest annual pace in more than 1-1/2 years in a sign that inflation probably will remain benign.

Non-farm payrolls increased by 261,000 last month as 106,000 leisure and hospitality workers returned to work, the US Labor Department said in its closely watched employment report on Friday. That was the largest gain since July 2016 but below economists’ expectations for a jump of 310,000 jobs.

Data for September was revised to show a gain of 18,000 jobs instead of a decline of 33,000 as previously reported.

With generally favorable US economic data, some traders noted that the slight uptick in the greenback might be tempered by global and domestic factors.

“Starting Wednesday, the dollar might shed its initial gain, as the appeal of the local currency might improve amid expectations of better Chinese trade reports and stronger Philippine industrial production data,” Landbank’s Mr. Dumalagan said. “These upbeat reports could weaken the greenback against the peso by improving investors’ risk appetite.”

Another trader said an expected surge in remittances to the Philippines in time for the holidays might push the peso higher this week.

“Since the [fourth quarter] is expecting a surge of remittances for the holidays, this might help the peso appreciate this week.”

Traders expect the peso to trade between P51 and P51.50 versus the dollar this week.

Meanwhile, Mr. Dumalagan gave a slimmer estimate between P51.05 and P51.35, as he noted that the possibility of some hawkish remarks from the Bangko Sentral ng Pilipinas (BSP) meeting this week might “increase the chance of some tightening moves” from the central bank in December or early next year, dragging the dollar. The BSP’s Monetary Board will hold a policy-setting meeting on Thursday. – Karl Angelo N. Vidal with Reuters