Peso climbs as inflation hits over three-year low

THE PESO gained against the dollar on Tuesday after headline inflation eased to an over threeyear low in January.

The local unit closed at P56.20 per dollar on Tuesday, rising by nine centavos from its P56.29 finish on Monday, Bankers Association of the Philippines data showed.

The peso opened Tuesday’s session lower at P56.37 against the dollar. Its intraday best was at P56.14, while its weakest showing was at P56.39 versus the greenback.

Dollars traded went up to $1.26 billion on Tuesday from $1.08 billion on Monday.

The peso strengthened on Tuesday as inflation continued to ease last month, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso strengthened amid local optimism following the softer inflation report for January 2024,” a trader said in an e-mail.

Headline inflation cooled to 2.8% in January from 3.9% in November and 8.7% a year ago, the Philippine Statistics Authority reported on Tuesday. This was the lowest print in over three years or since the 2.3% seen in October 2020.

The January consumer price index was slower than the 3.1% median estimate in a BusinessWorld poll and was at the lower end of the central bank’s 2.8-3.6% forecast for the month.

For Wednesday, the trader said the peso could drop anew due to potentially hawkish remarks from US Federal Reserve officials.

The trader expects the peso to move between P56.10 and P56.35 per dollar on Wednesday, while Mr. Ricafort sees the local unit ranging from P56.10 to P56.30. —