THE PESO rebounded on Thursday on weak data out of the United States which boosted bets of another rate cut in the world’s largest economy.
The local unit ended at P51.815 against the greenback yesterday, strengthening by 12.5 centavos from its P51.94 per dollar finish on Wednesday.
The peso started the session at P51.97 versus the dollar. It dropped to as low as P52.03 during the session, while its intraday best was at P51.80 against the greenback.
Dollars traded climbed to $1.186 billion from $971.1 million on Wednesday.
One trader attributed the peso’s recovery to weak US jobs data.
“During the morning session, players tried to buy [peso] on the back of risk-off sentiment overnight from weaker US ADP report,” the trader said.
Hiring by US private employers slowed further in September, suggesting that trade tensions, which have pressured manufacturing, could be spilling over to the labor market.
Private employers added 135,000 jobs in September, the ADP National Employment report showed.
Another trader said the “relatively dovish” speech by New York Federal Reserve Bank president John Williams last night also affected the dollar.
“The market is already pricing another 25-bp (basis point) cut this month and at the end of the year…That’s dollar weakening for you,” the second trader said by phone.
New York Federal Reserve Bank President John Williams said on Wednesday that while the US economy looked to be in a “favorable place” when viewed through the rearview mirror, the outlook through the windshield ahead was “mixed.”
For today, the first trader expects the peso to move around P51.60-51.80 versus the dollar, while the second trader forecasts a P51.75-51.95 range. — LWTN with Reuters