Peso locked in tight range ahead of data

THE PESO weakened anew against the dollar on Tuesday as investors continued to stay on the sidelines ahead of the release of Philippine inflation data and the meeting between the leaders of the world’s two biggest economies later this week.

The local currency closed at P50.175 against the greenback yesterday, losing four centavos from last Friday’s finish of P50.12to-a-dollar.

A trader said the pair continued to trade within a tight range amid a quiet market as seen in the volume of total dollars traded.

“Yesterday’s trading was still muted and very small liquidity was seen,” the trader said in a phone interview yesterday.

Dollars traded amounted to $287 million on Tuesday, almost halved from the $ 505.8 million that changed hands in the previous session.

“At first the dollar- peso was caught in a tight range but towards the afternoon, we saw a stronger dollar across the board and against major and regional currencies. The dollar-peso followed suit,” the trader said.

“Philippine inflation will be released [today] and in a way it has affected the pair’s trading.”

The Philippine Statistics Authority will report official inflation data for March today.

Analysts said in a BusinessWorld poll earlier this week that inflation might have settled at 3.4% last month on the back of higher electricity rates and a weaker peso.

“But still, a lot of traders are staying on the sidelines because there are no results of all the risk events [ that are expected] this week,” the trader said, referring to three major global and local developments: US President Donald J. Trump’s meeting with Chinese President Xi Jinping later this week, US non-farm payrolls (NFP) data to be released on Friday, and local inflation.

“The peso depreciated today likely because the US ISM manufacturing report in March 2017 beat market expectations even as it slowed from prior month,” another trader said.

Latest data from the Institute for Supply Management ( ISM) bared the index it uses to gauge national factory activity slipped to 57.2% in March, straying away from a two-and-a-half year high of 57.7% logged a month before.

“Gains were minimal due to caution ahead of the FOMC minutes and key US labor reports,” the trader noted.

The US Federal Open Market Committee (FOMC) minutes of its March 15-16 policy meeting will be released tomorrow.

For Wednesday’s session, both traders said they see the peso trading within P50.10 to P50.25 range against the greenback.

“The peso might move sideways with a downward bias due to bets of firm US labor reports and steady US balance trade,” one trader said. —