Peso seen mixed after rate move

THE PESO will likely move sideways against the dollar this week ahead of likely mixed economic data in the United States and following the policy rate adjustment by the local central bank.

On Friday, the local unit closed at P53.135 versus the greenback, 4.5 centavos down from Thursday’s P53.09 finish, as investors awaited US inflation readings. Week on week, the peso strengthened from the P53.15 finish on Aug. 3.

On Friday, a trader said the peso may move sideways with a downward bias at the start of the week following the stronger-thanexpected US inflation reports.

Reuters reported that consumer prices in the US rose in July as it points to a steady rise in inflation pressures that keeps the Federal Reserve on track to gradually hike interest rates.

Consumer price index (CPI) increased 2.9% in the 12 months through July, matching the increase in June.

Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines, said the dollar may also benefit from the “alarming decline” of Turkish lira.

“The said currency has been battered recently due to Turkey’s large fiscal stimulus, growing inflation and current account deficit, as well as political intervention on central bank decisions,” Mr. Dumalagan said in an e-mail on Saturday.

Meanwhile, the peso is seen to strengthen against the dollar mid-week on the back of “likely mixed” US economic reports.

“US retail sales and industrial production reports for July 2018 are expected to come out softer, affirming views that the Federal Reserve would continue to normalize policy rates gradually, even as it remains on track to hiking rates two more times this year,” he said.

FULL STORY

Read the full story by scanning the QR code with your smartphone or by typing the link <https://goo.gl/msizoK>