Peso weakens vs dollar
THE PESO inched lower yesterday driven by the favorable economic data in the US released last week.
The local unit closed at P51.28 against the dollar on Monday, dropping seven centavos from its P51.21 finish on Friday.
The peso opened weaker at P51.30. It dropped to as low as P51.355 during the session, while its strongest showing intraday was at P51.26 against the dollar.
Dollars traded on Monday totalled $330.95 million, plunging from last Friday’s $693.2 million.
Traders interviewed on Monday attributed the slightly weaker peso to the stronger greenback, which was mainly due to the favorable US economic data released last week.
“While there’s nothing much demand coming in, given the thin volume, you can argue the slight loss of the peso can be attributed to the NFP (non-farm payroll) data released last week,” a trader said in a phone interview.
On Friday, the US Bureau of Labor Statistics reported that 261,000 jobs were created last month, a big leap from the new 18,000 jobs booked the previous month.
However, another trader said that attributing the peso-dollar movement to the recent jobs data is “counterintuitive.”
“It was a weak report but the dollar strengthened. I don’t think it was the reason,” the trader noted.
Meanwhile, for Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines (UnionBank), the currency’s movement can also be attributed to the market’s anticipation for the upcoming Association of Southeast Asian Nations (ASEAN) Summit.
“Not much actually happened today. It seems that the peso just barely moved with the anticipation of the ASEAN summit, which I expect to have some positive impact on the general sentiment about the Philippines as a continuing growth story in Asia,” Mr. Asuncion said in an e-mail on Monday.
Starting this Friday, the 31st ASEAN Summit and Related Meetings will be held in Manila. Leaders of the ten-country bloc and its dialogue partners are expected to attend.
For tomorrow, traders expect the peso to trade between P51.10 and P51.40. Meanwhile, UnionBank’s Mr. Asuncion gave a wider range of P51 to P51.50.
Meanwhile, most Asian currencies also struggled on Monday after uninspiring US jobs data issued late last week failed to dim the prospects of another US Federal Reserve rate hike in December. — KANV with Reuters
