THE peso strengthened against the dollar on Friday ahead of the long weekend.
The currency ended yesterday’s session at P52.02 against the dollar, strengthening from the P52.115 close on Thursday.
The peso opened at P52.15, while its intraday low was P52.16. The high was at P52.01 to the dollar.
Volume rose to $645.8 million from $483 million on Thursday.
A foreign exchange trader noted that though dollar sales were heavy, the US currency largely kept to its trading range.
“I don’t know where the flows are coming but we saw a lot of selling,” the trader said. “If you look at the range, we’re still trading within that band where the dollar has been trading for two weeks.”
ING Bank N.V. Manila branch said the peso is trending weaker, contributing to the uptick in inflation.
“[T]he sustained weakness of the peso is likely to increase its impact on overall inflation,” ING Bank economist Jose Mario I. Cuyegkeng said in a statement, calculating that currency factors will add 0.25 percentage points to inflation in April.
Headline inflation accelerated to 4.3% year-on-year in March under the 2012 base year, the Philippine Statistics Authority announced on Thursday. This rose from the previous month’s level of 3.8% and the year-earlier 3.1%.
The Bangko Sentral ng Pilipinas expects inflation “to average near the high end of the target range in 2018 before decelerating further to the midpoint of the target range in 2019.”
“A weak peso may eventually spur the central bank to turn hawkish,” Mr. Cuyegkeng added. — Karl Angelo N. Vidal