Peso strengthens in muted trade ahead of March inflation report
THE PESO strengthened against the dollar on Tuesday amid “quiet” trading as investors continue to wait for local inflation data to be released on Friday.
The local currency closed Tuesday’s session at P52.44 versus the greenback, 6.5 centavos stronger than the P52.505 finish on Monday.
The peso opened slightly stronger at P52.50 versus the dollar, slipping to as low as P52.57 intraday. Meanwhile, its best showing for the day stood at P52.43 per dollar.
Dollars traded grew to $924.61 million from the $801.53 million that switched hands the previous day.
A foreign exchange trader said the market remained quiet yesterday as the peso just moved within range.
“Although we closed near the low, the downward movement was on thin volume,” the trader said in an interview. “The market is still being cautious ahead of the Philippine CPI (consumer price index) data.”
Inflation for the month of March is widely expected to have eased further on the back of lower rice and food costs.
A BusinessWorld poll of economists yielded a 3.5% median, which if realized would be slower than February’s 3.8% print. This will keep inflation on a downtrend for the fifth straight month.
“We think this low volatility will persist for the peso,” the trader added.
Meanwhile, another trader said the peso strengthened on profit taking following the weaker US retail sales report and ahead of a likely weaker US durable goods data.
“The local currency also strengthened due to lingering risk appetite in the markets amid upbeat manufacturing data from the US and China,” the trader said.
China’s manufacturing sector unexpectedly reversed to growth in March at 50.8 from a decline of 49.9 a month ago, according to Caixin/Markit Manufacturing Purchasing Managers’ Index released on Monday.
For today, the first trader expects the peso to move between P52.30 and P52.60 versus the dollar, while the other gave a P52.35-P52.55 range. — K.A.N. Vidal
