Peso strengthens on mixed data

THE PESO strengthened further against the dollar on Monday on the back of continued pressure on the US currency due to economic data there.

The local unit ended Monday’s session at P53.56 against the greenback, eight centavos stronger than the P53.64 close last Friday.

The peso traded stronger the whole day, opening the session at P53.57 per dollar, climbing to as high as P53.54 intraday. Its worst showing meanwhile was at P53.635 versus the dollar.

Trading volume thinned to $645.25 million from the $723 million that switched hands last Friday.

A foreign exchange trader said the peso moved within a tight range yesterday as it traded stronger.

“Today’s intraday [low] was near Friday’s close. In addition, we saw the dollar index peaked,” the trader said in a phone interview on Monday.

Reuters reported that the greenback edged higher against a basket of currencies, with the dollar index standing at 96.446.

Despite this, another trader said the peso moved sideways due to the continued pressure on the dollar due to mixed economic data.

The US economy grew at a 3.5% pace in the third quarter, faster than the 3.4% market consensus. However, the personal consumption expenditure price index, the preferred inflation indicator by the Federal Reserve (Fed), rose 1.6% in the July-September period year-on-year, slower than the 2.2% projected by economists.

“The pressure is still on the dollar due to diminished expectation of another rate hike from the Fed this December,” the second trader said.

Meanwhile, UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion said the peso “barely moved” yesterday, although the currency is expected to strengthen this week and in the coming weeks until the yearend “as the seasonal remittances influx begin.”

For Tuesday, the traders expect the peso to move between P53.45 and P53.65, while Mr. Asuncion gave a P53.20-P53.50 range. •