THE PESO will likely weaken a tad against the dollar this week amid mixed geopolitical and economic signals abroad, as investors await the release of gross domestic product (GDP) growth data.
The local unit ended last week at P52.515 versus the greenback, down from P52.41 finish last Thursday due to continued concerns over the UK’s Brexit deal as well as the partial US government shutdown.
Week-on-week, the peso also weakened from the P52.14-per-dollar finish last Jan. 11.
A market analyst said on Sunday that the dollar may appreciate against the peso today on the back of safe-haven buying as fourth-quarter economic growth data from China is expected to soften.
“Speculations of a second Brexit referendum as well as optimism on the US-China trade talks are also expected to lift the dollar, despite growing views of a pause in US policy tightening this year and last Friday’s mixed US data consumer sentiment and industrial production,” the analyst added.
Towards the end of the week, the dollar may move sideways with a downward bias, weighed down by a potentially stronger fourth-quarter Philippine GDP growth report.
The market analyst said the Philippine economy likely expanded to 6.4% in the fourth quarter from the 6.1% in the July-September period, buoyed by decelerating inflation.
Meanwhile, UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion said in text message on Friday the peso might strengthen for a while if the economic data turns out better than expected.
“But, I expect that the general trend is to weaken because of the trade balance,” he added.
The country’s trade deficit narrowed in November to $3.9 billion from the record high of $4.08 billion in October, given that imports grew at a slower pace even as exports shrank.
For this week, Mr. Asuncion expects the peso to trade between P52.30 and P52.60 versus the dollar, while the analyst gave a wider P52-P52.80 range. — Karl Angelo N. Vidal