Peso weakens ahead of US inflation data
THE PESO weakened against the greenback on Wednesday, even as it breached the P51 level intraday, as market players awaited the release of US inflation data. The local currency ended yesterday’s session at P52.13 versus the greenback, 5.5 centavos weaker than the P52.075per-dollar finish last Tuesday.
THE PESO weakened against the greenback on Wednesday, even as it breached the P51 level intraday, as market players awaited the release of US inflation data.
The local currency ended yesterday’s session at P52.13 versus the greenback, 5.5 centavos weaker than the P52.075-per-dollar finish last Tuesday.
The peso opened the session stronger at P51.96 per dollar, reaching to as high as P51.90 intraday. On the other hand, its worst showing stood at P52.17 against the US currency.
Trading volume slid to $1.098 billion from the $1.165 billion that switched hands the previous day.
A foreign exchange trader said the peso continued to swing sharply as it traded strongly in the morning session.
“We saw the market pushed the peso lower during the morning session, but in the afternoon, we saw inflows from corporations, pushing the peso to a high of P52.17,” the trader said in a phone interview.
Another trader said the local unit depreciated as local players positioned ahead of the release of US inflation data.
The consumer price index (CPI) in the US is expected to decelerate in January amid absence of inflationary pressures.
In a note, financial giant Morgan Stanley said that falling oil prices should “continue to weigh on the energy category,” where prices are expected to decline by 1.8%.
“Projections show that US CPI is likely to indicate softer readings but the market is still uncertain as the data is seen either to confirm or contradict the Federal Reserve’s assessment on the US economy during its latest meeting,” the second trader added.
While the dollar strengthened slightly against the peso, it edged lower against its peers on Wednesday as upbeat expectations on the US-China trade deal prompted investors to put money into riskier currencies, Reuters reported.
US and Chinese officials are set to meet this week in Beijing in hopes to strike a trade deal before the March 1 deadline of its 90-day truce.
For today, the second trader expects the peso to trade between P52 and P52.20, while the other gave a wider range of P52 and P52.40. —