THE peso weakened versus the greenback on Tuesday after data showed a faster-than-expected rise in consumer prices in June.
The local unit closed at P49.54 against the dollar on Tuesday, depreciating by 15.9 centavos from its P49.381 finish on Monday, data from the Bankers Association of the Philippines showed.
The peso opened the session at P49.35 per dollar. Its weakest showing was at P49.55 while its intraday best was at P49.30 against the greenback.
Dollars traded surged to $1.092 billion from the $609.77 million on Monday.
The peso dropped due to inflation data released yesterday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
“The peso closed weaker, largely brought about by the higher than expected inflation data,” he said in a text message.
The Philippine Statistics Authority on Tuesday reported that headline inflation in June stood at 2.5%, slower than the 2.7% seen in the same month last year but quicker than the 2.1% seen in May. The pickup was due to higher food, fuel and transport prices.
The 2.5% June print is also faster than the 2.1% median estimate in BusinessWorld’s poll of 16 economists last week.
Meanwhile, a trader attributed the peso’s depreciation to profit-taking.
“The local currency weakened from dollar bargain-hunting by market participants following the appreciating trend of the peso in the past few days,” the trader said in an email.
For Wednesday, Mr. Ricafort and the trader expect the local unit to move around the P49.40 to P49.60 levels versus the dollar. — LWTN