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Peso closes higher after mild US inflation report

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PHILIPPINE STAR/KRIZJOHN ROSALES

THE peso strengthened on Friday after the US reported milder-than-expected inflation data and as hopes were raised for progress on the US-China trade dispute.

The peso ended the week at P54.13 against the dollar, after finishing at P54.18 on Thursday.

The peso was stronger the whole day, though trading in a narrow range, opening at P54.10. The high was P54.03 and the low was P54.13.

Trading volume rose to $776.1 million from $665 million the previous day.

A foreign exchange trader said the peso appreciated “after the release of unexpectedly softer (US) consumer inflation data…”

Consumer prices in the US rose less than expected in September driven by slower growth in rents and falling energy prices, Reuters reported, even amid a robust labor market.




Another trader added that inflation was the main factor while corporate demand for pesos also provided a boost.

“Due to large corporate demand, it was lifted to close at P54.13,” she added.

The first trader also noted that China and US are both attending the G20 summit in Argentina, rasing the possibility of trade talks on the sidelines, weighing on the dollar.

“As the International Monetary Authority mainly cited the ongoing US-China trade war as a major risk for global economic growth slowdown, this news of possible trade talks sparked some optimism in the markets,” the trader said in an e-mail.

UnionBank chief economist Ruben Carlo O. Asuncion said the rangebound trading intraday signals how the market “is just waiting for drivers.” — Karl Angelo N. Vidal