Peso to rise ahead of PHL data

THE PESO will likely strengthen this week ahead of likely upbeat economic reports in the Philippines, boosted by the softer-thanexpected jobs data out of the United States.

The local unit closed Friday’s session at P53.15 against the greenback, down six centavos from its P53.09per-dollar finish on Thursday.

However, the peso climbed week-on-week from its P53.285per-dollar finish on July 27.

Foreign exchange traders said on Friday that the dollar might weaken today should the non-farm payrolls data come out weaker than expected.

The US produced 157,000 additional jobs in July, the slowest gain since March and lower than the 190,000 jobs expected by economists in a Reuters poll.

However, the unemployment rate declined by a tenth of a percentage point to 3.9%.

“After depreciating on Monday due to weaker-than-expected US non-farm payrolls report, the greenback may drop further the following day amid likely upbeat Philippine inflation data,” Land Bank of the Philippines market economist Guian Angelo S. Dumalagan said in an e-mail on Saturday.

Headline inflation is seen to accelerate further in July to 5.5%, according to the median estimate in a BusinessWorld poll among 14 economists.

If realized, last month’s inflation print would be faster than the 5.2% print in June as well as the 4.6% in May.

Mr. Dumalagan added the peso might continue to strengthen as investors cautiously anticipate the interest rate decision of the Bangko Sentral ng Pilipinas (BSP).

“The dollar may remain weak until Thursday, as the BSP is widely expected to hike rates again by at least 25 bps to arrest inflationary pressures and manage financial market volatility,” he said.

The BSP has been signalling a hike in interest rates when it meets this week, with its chief saying earlier that the monetary authority is “ready to follow through” on the two rate hikes in May and June. •