Peso drops anew ahead of March inflation report
THE PESO declined against the dollar on Thursday, dragged by market positioning ahead of local inflation data.
The local unit ended Thursday’s session at P52.18 versus the greenback, down 10 centavos from the P52.08-per-dollar finish on Wednesday.
The peso opened the session weaker at P52.13 per dollar, sliding to as low as P52.195. On the other hand, its best showing stood at P52.01 versus the US currency.
Dollars traded grew to $1.175 billion from the $948.95 million that changed hands the previous day.
A foreign exchange trader said yesterday that the peso closed weaker following a volatile session.
“We traded all over the place. The peso started higher, then traded lower, then went up again to close near the high,” the trader said in a phone interview.
“I think the market was just really looking for direction at the moment. Tomorrow, we have the CPI (consumer price index) data, so the short positions took profit or long positions cut losses,” the trader said on Thursday.
The market expects inflation for the month of March to have eased amid lower food and rice prices. A BusinessWorld poll among economists yielded a 3.5% median forecast, which if realized would be slower than February’s 3.8% print.
The estimate also sits well within the 3.1-3.9% forecast range of the Bangko Sentral ng Pilipinas.
“Higher domestic oil prices and upward adjustment in electricity rates, provide upside price pressures to inflation for the month. These may be partly offset by lower prices of rice and other agricultural commodities due to the arrival of imports,” the central bank’s Department of Economic Research said.
“The local currency closed weaker today due to positioning ahead of likely softer Philippine inflation report which might increase dovish policy expectations,” another trader said on Thursday.
For today, the first trader said the peso will likely move between P52 and P52.30 versus the dollar, while the other projected a P52.05-P52.35 range.
“The peso might depreciate following the impact of the softer inflation report and likely firm US labor reports for March,” the second trader noted. — Karl Angelo N. Vidal
