THE PESO strengthened against the dollar on Thursday on the back of weak economic data in the United States.
The local unit closed Thursday’s session at P51.13 versus the greenback, three centavos stronger than the P51.16-per-dollar finish on Wednesday.
The peso opened the session slightly weaker at P51.18 per dollar. It dipped to as low as P51.20 intraday, while its best showing stood at P51.04.
Trading volume dropped to $775.7 million from the $924.2 million that switched hands the previous session.
“The peso strengthened on heightened bets of a July (US Federal Reserve) rate cut following the release of weaker new jobs and non-manufacturing sector reports,” a trader said in an e-mail.
According to a report from Automatic Data Processing, Inc. and Moody’s Analytics, private companies in the United States created only 102,000 jobs in June, missing the market estimate of 140,000 polled by Reuters.
On the other hand, the non-manufacturing index conducted by the Institute for Supply Management stood at 55.1 in June, falling short of the 56.9 tallied in May as well as the 55.9 expected by the market.
These reports come ahead of the release of June non-farm payrolls (NFP) data on Friday which is expected to have climbed to 160,000 in June, coming from a meager 75,000 jobs in May.
However, another trader said the weak economic data had little effect on peso-dollar trade.
“There was an initial reaction overnight, although come morning, most currencies like the peso didn’t move much,” the second trader said. “Most of the currencies, just like the peso, traded fairly quiet, given the US holiday on July 4.”
The trader added that market players are still waiting for the NFP as well as the June inflation to be released today.
For today, both traders expect the peso to trade between P51 and P51.30. — Karl Angelo N. Vidal