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Peso flat ahead of Fed decision

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THE PESO closed flat against the greenback on Wednesday as the market awaits clearer signals from the US Federal Reserve following its policy meeting.

The local unit ended at P49.19 per dollar on Wednesday, unchanged from its Tuesday close, data from the Bankers Association of the Philippines showed.

The peso opened the session flat at P49.19 per dollar, which was already its strongest showing. Meanwhile, its intraday low was at P49.24 against the greenback.

Dollars traded dropped to $551.71 million on Wednesday from the $849.4 million seen on Tuesday.

The peso’s flat finish showed the market was on the sidelines as they awaited the policy decision of the Fed, a trader said.

“The peso closed flat amid uncertainty from the US Federal Reserve’s monetary policy decision this Thursday,” the trader said in an email.

The policy-setting Federal Open Market Committee is reviewing policy from July 30-31, with the market hoping the Fed will keep rates near zero to support economic recovery.

For his part, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the local unit closed unchanged following “weaker US consumer confidence data”.

Reuters reported that the US’ consumer confidence index decreased to a reading of 92.6 in July coming from the 98.3 in June, data from The Conference Board showed. This is also lower than a 94.5 estimate for the month from a Reuters poll of economists.

For Thursday, the trader expects the peso to move around the P49.10 to P49.30 levels versus the dollar while Mr. Ricafort gave a forecast range of P49.15 to P49.30. — L.W.T. Noble with Reuters





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