Advertisement

Peso rebounds ahead of December inflation data

Font Size

BW FILE PHOTO

THE PESO bounced back on Monday after two days of decline against the greenback on profit taking ahead of the release of data showing likely faster inflation in December.

The local unit ended trading at P50.93, appreciating by 16 centavos from its Friday close of P51.09 per dollar.

The peso opened at P51.08 against the greenback. Its weakest showing was at P51.32 while its intraday best was at P50.92 versus the dollar

Dollars traded slipped to $1.579 billion on Monday from $1.598 billion on Jan. 3.

Traders attributed the peso’s stronger finish mainly to profit taking in the market.

“The peso appreciated in the afternoon trade as local participants started to take profits in anticipation of stronger Philippine inflation report for December which will be released this Tuesday,” a trader said in an e-mail.




BusinessWorld’s poll of 13 economists yielded a median estimate of 2.1% which is nearer the lower end of the central bank’s forecast range of 1.8-2.6% for December headline inflation.

If realized, this would be faster than November’s 1.3% print and will also be the second straight month of uptick.

Economists cited factors such as the price pickup in commodities backed by the seasonal holiday demand, paired with continued diminishing base effects and weather disruptions.

Another trader noted that Monday’s trading was “volatile.”

“We saw risk-off sentiment in the morning, but market was very long in position and there was profit taking,” he said in a phone call.

The trader noted that headlines in the morning were initially not positive for the peso, including threats from Washington to strike Iranian sites should it retaliate after the drone strike that killed their key military official last week.

Reuters reported that US President Donald J. Trump on Sunday night stood by his earlier tweets that warned of major retaliation should Iran do a retaliatory step.

“They’re allowed to use roadside bombs and blow up our people and we’re not allowed to touch their cultural sites? It doesn’t work that way,” he told reporters on Air Force One.

For today, the first trader sees the peso playing around the P50.80 to P51 level, while the second trader forecasted a range of P50.80-P51.20. — Luz Wendy T. Noble with Reuters









Advertisement