THE PESO weakened slightly against the dollar on Tuesday amid market uncertainty ahead of key economic data releases here and in the United States.
The local unit closed yesterday’s session at P51.11 versus the greenback, six centavos weaker than its P51.05-per-dollar finish on Monday.
The peso traded in a wide range, opening the session at P51.17 per dollar. It climbed to as high as P51, while its worst showing stood at P51.20 against the US currency.
Dollars traded climbed to $931.4 million from the $870.2 million that switched hands the previous day.
A trader said in a phone interview that the peso ended weaker even as the market was volatile the whole day.
“In the morning, we traded at the [low] of P51.20, although we broke the support level at P51.05 in the late afternoon. Ultimately, the peso settled at P51.11,” the trader said yesterday.
The trader added that the market was “quite undecided” ahead of US non-farm payrolls data to be released later this week.
“I think it will determine the move in the coming days, but we’re expecting a positive data.”
Another data market players are waiting for is the local inflation report to be released by the Philippine Statistics Authority on Friday.
Market watchers expect inflation to have slowed in June. A BusinessWorld poll of 12 economists yielded a 2.9% estimate median, which if realized would be slower than May’s 3.2% print.
The Bangko Sentral ng Pilipinas Department of Economic Research said June headline inflation likely landed within 2.2-3% on lower rice and domestic oil prices, downward adjustment in electricity rates and the peso’s appreciation.
Meanwhile, another trader said the peso weakened following the release of stronger-than-expected manufacturing data in the US, as well as strong dollar bargain-hunting after the peso hit a record high on Monday. Monday’s close was the peso’s best showing in more than a year or since it closed at P50.84 against the dollar last Jan. 26, 2018.
For today, both traders expect the peso to trade between P51 and P51.20 versus the dollar.
Most emerging Asian currencies also lost ground against a broadly stronger dollar on Tuesday as uncertainty crept back over the US-China trade deal, while weak factory data across the globe rekindled concerns about the health of the world economy.
Initial enthusiasm over the Sino-US trade truce, which triggered a relief rally on Monday, gave way to doubts about whether the two sides could come to an agreement, with US President Donald Trump declaring any trade deal with China would need to be “somewhat tilted” in favor of the United States. — Karl Angelo N. Vidal with Reuters