Peso inches up vs dollar
THE PESO inched higher against the dollar on Tuesday amid expectations of weaker US jobs and manufacturing data.
The local unit closed at P55.95 per dollar on Tuesday, rising by two centavos from its P55.97 finish on Monday, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s session weaker at P56 against the dollar. Its worst showing was at P56.04, while its intraday best was its closing level of P55.95 versus the greenback.
Dollars exchanged went up to $821.65 million on Tuesday from $768.2 million on Monday.
“The peso strengthened ahead of a potentially weaker US services PMI (purchasing managers’ index) report,” a trader said in an e-mail.
The peso gained as the dollar moved sideways on expectations of softer US jobs data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
He said weak employment data could justify future rate cuts by the US Federal Reserve.
The Fed raised borrowing costs by 525 basis points from March 2022 to July 2023 to the 5.25-5.5% range.
For Wednesday, the trader said the peso could weaken against the dollar amid market caution ahead of Fed Chair Jerome H. Powell’s semi-annual US Congressional testimony.
The trader sees the peso moving between P55.85 and P56.10 per dollar on Wednesday, while Mr. Ricafort expects it to range from P55.85 to P56.05.
Meanwhile, the dollar was steady against the yuan on Tuesday as markets digested policy statements out of China that were short on big stimulus measures, while a rebound in Tokyo inflation seemed to take Japan a step closer to the end of negative interest rates, Reuters reported.
Spot yuan opened at 7.1950 per dollar and was changing hands at 7.1985, while the offshore yuan was little changed at $7.2100 as markets hoped more concrete stimulus measures would emerge.
The dollar was last at 150.44 yen, having again shied away from resistance around 150.85, which has capped the currency for more than three months now.
A break higher would open the way to November’s top at 151.92, but would also run the risk of provoking Japanese intervention.
The dollar index, which measures the currency against six major peers, edged higher to 103.87. — AMCS with