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Peso strengthens to P51:$1 level

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THE PESO strengthened against the dollar on Monday, returning to the P51-per-dollar level, as market players await May inflation data.

The local unit closed yesterday’s session at P51.91 versus the greenback, 25 centavos stronger than the P52.16-per-dollar finish on Friday.

The peso opened the session at its worst showing of P52.15 versus the dollar. Still, it traded stronger the whole day, closing at its intraday high.

Trading volume thinned to $782.85 million from $988.32 million that switched hands the previous session.

UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion said the peso strengthened as market players expect slower inflation in May.

“Investors are probably anticipating the positive impact of a slower May inflation signalling more support for more monetary easing in the next coming months,” said Mr. Asuncion in a text message.




A BusinessWorld poll of 11 economists conducted last week yielded a three percent median estimate, lower than the 4.6% print in the same month last year and flat from April’s pace. This median sits near the lower end of the 2.8-3.6% estimate range of the Bangko Sentral ng Pilipinas (BSP).

The Philippine Statistics Authority will release May inflation data on June 5.

Meanwhile, in an interview last week in Tokyo, BSP Governor Benjamin E. Diokno said the central bank has “more room for monetary easing” and vowed more cuts.

“This particular driver may have resonated more to investors than the protracted trade issues between US and China, and more recently, the US and its neighbor Mexico,” Mr. Asuncion added.

Meanwhile, a trader said the peso strengthened “as global markets start to price in a possible policy rate cut from the US Federal Reserve from the probable impact of heightening trade conflicts.”

For today, Mr. Asuncion expects the peso to trade between P51.70 and P52.10, while the trader gave a P51.80-P52 range. — Karl Angelo N. Vidal