Advertisement

Peso rises versus dollar on US nonfarm payrolls

Font Size

BW FILE PHOTO

THE PESO strengthened against the dollar on Monday on weaker-than-expected US jobs data.

The local currency closed at P51.865 against the greenback, four centavos stronger than Friday’s close of P51.905 versus the dollar.

The peso opened at P51.88 against the dollar. It traded within a narrow range, with its weakest point logged at P51.90, while its intraday best was at P51.77 against the greenback.

Dollars traded on Monday was down to $1.073 billion from the $1.449 billion seen on Friday.

“The peso strengthened following the weaker-than-expected August 2019 US nonfarm payrolls report and dovish comment from Fed Chairman Jerome Powell that the Federal Reserve remains committed to sustain the US economic growth,” one trader said.

Rizal Commercial Banking Corp. economist Michael L. Ricafort added that local data, including the improvement in gross international reserves (GIR) as well as inflation’s decline to a three-year low of 1.7% in August also pushed the peso up.




The Bangko Sentral ng Pilipinas reported on Friday that GIR went up to $85.61 billion as of end-August from $85.18 billion the previous month.

The end-August reserves — which serve as a buffer for liquidity shocks — is equivalent to 7.5 months worth of imports and payments of services and primary income, the central bank said.

Meanwhile, US job growth slowed more than expected in August, reflecting the US trade war with China and raising expectations for a Federal Reserve rate cut this month.

Nonfarm payrolls rose by 130,000, some 28,000 less than analysts expected and a 29,000 drop from July, but average hourly earnings increased slightly and jobless rates remained steady.

For today, the first trader sees the peso slipping on likely softer China inflation data.

“This might increase speculation of monetary stimulus from the People’s Bank of China due to the lingering impact of the ongoing trade war between the US and China,” the trader said.

The trader sees the peso playing around the P51.80-P52.00 range, while Mr. Ricafort said it could move within P51.70-P52.00 against the dollar. — L.W.T. Noble with Reuters

Advertisement