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Peso firmer after below-forecast US inflation

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THE peso firmed below the P54-to-the-dollar level, after the US currency weakened after the release of lower-than-expected inflation data.

The peso ended the week at P53.97 against the dollar, 10 centavos stronger than its close on Thursday.

The peso was stronger the entire session, opening at P54.02. The high was P53.965 and the low was P54.06.

Trading volume rose to $660.15 million from $658.3 million in the previous session.

A foreign exchange trader said the peso strengthened against the dollar but remained in a narrow range.

“I think it traded [stronger] due to dollar index falling overnight,” the trader said in a phone interview Friday.

The dollar index weakened to a two-week low of 94.491 against a basket of six major currencies following weaker-than-expected US inflation data and amid an easing of trade tensions between the US and China, Reuters reported.

The US consumer price index, the government’s broadest inflation gauge, rose 0.2% in August, below the 0.3% expected according to a Reuters poll.

“The weaker-than-expected US consumer inflation report yesterday (eased) some pressure on the dollar,” another trader said in an e-mail.

Meanwhile, White House Economic Council Head Larry Kudlow said in an interview that US Treasury Secretary Steven Mnuchin invited senior Chinese officials to restart trade talks as the US prepares to impose steep tariffs on Chinese goods.

The first trader added that the peso also recovered “in preparation for the possible inflows over the weekend.”

“The range was kind of tight due to some corporate demand. We saw some support due to the demand,” she added. — Karl Angelo N. Vidal





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