THE PESO is expected to strengthen against the dollar this week on the back of potentially softer inflation for November, coupled with mixed developments in the United States as well as a seasonal surge in remittances for the holiday season.
The local currency strengthened on Thursday to P52.45 versus the greenback from the previous close of P52.585 following the dovish speech of US Federal Reserve Chair Jerome Powell. Week on week, the peso was steady from the P52.45 finish on Nov. 23.
Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines, said the dollar is seen to move sideways with a downward bias, boosting the peso.
“In the first three days of the week, the greenback may depreciate, despite some hawkish hints from US policy makers, amid expectations of softer domestic inflation data for November 2018.”
Rizal Commercial Banking Corp. economist Michael L. Ricafort, on the other hand, said slower inflation as well as the “expected seasonal surge in the conversion of OFW (overseas Filipino workers) remittances for Christmas-related spending” as well as lower oil prices lingering at the one-year lows will lead to a stronger peso for this week.
Towards the end of the week, Mr. Dumalagan said the dollar might recover some of its losses brought by likely hawkish statements from Federal Reserve officials as well as bets of firm labor reports.
For this week, he expects the peso to move between P52.10 and P52.70, while Mr. Ricafort gave a P52-P52.30 forecast. — KANV