THE PESO failed to sustain its rally against the dollar on Thursday amid the dovish tone of the minutes of the latest US Federal Reserve meeting.

The local unit moved sideways at P50.68 versus the greenback on Thursday, losing six centavos from Wednesday’s close of P50.62.

The peso opened stronger at P50.55. Its intraday low was registered at P50.68, while its high was at P50.54 versus the dollar.

Dollars traded surged to $604.7 million from Wednesday’s $533 million.

“The peso depreciated today, as the market corrected after the dollar declined in the first three days of the week,” Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines (Landbank) said in an e-mail on Thursday.

Traders interviewed said the peso picked up in morning trading as the market viewed the minutes of the latest Fed monetary policy meeting as “dovish”, noting the uncertainties of US inflation lingering below the 2% “for longer than expected.”

Many Federal Reserve policy makers expect that interest rates will have to be raised in the “near term,” according to the minutes of the US central bank’s last policy meeting released on Wednesday.

The readout from the Oct. 31-Nov. 1 meeting, at which the Fed kept rates unchanged, also showed policy makers generally agreed the economy was poised for strong growth. Several Fed officials also saw improved chances that the US Congress would pass significant tax cuts that would boost business investment.

While some policymakers said they still needed to see more data before deciding the timing of a rate hike, many of the officials said the jobless rate appeared to be too low for inflation to remain at its current weak level. “Many participants thought that another increase in the target range for the federal funds rate was likely to be warranted in the near term.”

The central bank has increased rates four times in a tightening cycle that began in late 2015. The Fed currently predicts one more rate rise this year and three more hikes in 2018.

Meanwhile, another trader noted that news regarding the Brexit talks tempered the descent of the greenback.

“I think the signals globally are somewhat mixed. I saw some problems in the Brexit talks so it generally supported the dollar,” the trader said, noting that the US markets were in a break in time for Thanksgiving.

Traders said the peso will likely move between P50.40 and P50.90 versus the dollar today, as Landbank’s Mr. Dumalagan noted that “the peso might continue to depreciate as the dollar might continue to recover amid US rate hike concerns.” — Karl Angelo N. Vidal with Reuters