Peso strengthens on inflation data

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The peso strengthened against the dollar on Tuesday, June 5,  following the slower-than-expected inflation print in May.

The local unit closed the session at P52.40 against the greenback, 18 centavos stronger than the P52.58-per-dollar finish on Monday.

The peso opened the session flat at P52.58, while it slipped to a low of P52.62 per dollar. Meanwhile, its intraday high stood at its P52.40 finish.

Dollars traded rose to $646.7 million from $493.8 million that switched hands the previous day.

Traders said that the peso strengthened in reaction to the slower-than-expected May inflation print.

“Softer-than-expected inflation level probably helped the peso’s strength,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said in a text message Tuesday.

The increase of prices of basic goods and services accelerated to a new five-year high of 4.6%.

This was a tad faster than the 4.5% print recorded the previous month, although slower than the 4.9% expectation according to a BusinessWorld poll of 10 economists.

The faster inflation print last month was mainly driven by price increases on fuel, rice, fish and meat. — Karl Angelo N. Vidal