THE PESO appreciated on Tuesday ahead of US inflation data and amid positive signals regarding the US-China trade war.
The local unit closed at P50.735 against the greenback on Tuesday, strengthening by 3.5 centavos from its P50.77-per-dollar finish on Monday, according to data from the Bankers Association of the Philippines.
The peso opened the session at P50.82 per dollar, which was also its intraday low. Meanwhile, its strongest showing was at P50.70 against the greenback.
Dollars traded climbed to $742.36 million from the $653.4 million seen on Monday.
A trader attributed the peso’s movement to the market anticipating US data.
“The peso strengthened ahead of likely weaker US consumer inflation reports for November 2019,” the trader said in an e-mail.
Reuters reported that a New York Federal Reserve survey found that US consumers’ inflation expectations saw an uptick in November, bringing the outlook for near and medium-term inflation inch up from a five year low. If realized, this could relieve policy makers that are worried about sagging inflation.
The US Bureau of Labor Statistics is set to release the data on consumer price index on Dec. 11.
Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said headlines related to the US-China trade war may have also affected Tuesday’s peso trading.
“The slight strength of the peso may have come from the positive news from the US agriculture secretary [Sonny Perdue] saying that the US may no longer push through with the additional tariffs on China scheduled to happen on Dec. 15. However, the market is still cautious about the eventual conclusion of the Phase 1 deal between China and the US,” Mr. Asuncion said in a text message.
Mr. Perdue told reporters on Monday that US President Donald J. Trump is not looking to impose the next round of scheduled tariffs against goods from China on Dec. 15, but wants the Asia’s biggest economy to make a “movement” to avoid them, Reuters reported.
“I don’t think the president wants to implement these new tariffs, but there has got to be some movement on their part to encourage him not to do that,” Mr. Perdue said, according to an audio recording of his responses to reporters’ questions.
“And hopefully the signal they sent over soy and pork reductions might be that signal,” he added, speaking at a National Grain and Feed Association conference in Indianapolis.
For today, the trader sees that the peso will move around P50.65-50.85 against the dollar, while Mr. Asuncion gave a forecast range of P50.50-50.80. — Luz Wendy T. Noble with Reuters