Peso rebounds ahead of Yellen
THE PESO bounced back yesterday, closing stronger than the dollar, after a string of weak data from the United States prompted investors to rethink the timing of succeeding rate hikes in the world’s largest economy.
The local currency closed at P46.35 versus the dollar on Thursday, stronger by 17.5 centavos compared to the previous day’s finish of P46.525 against the foreign unit.
The peso opened yesterday’s trading at P46.55 per dollar, which was already near its weakest intraday level of P46.58 versus the foreign unit. The peso’s strongest point yesterday was logged at P46.34 per dollar.
Trading volume increased to $ 509.5 million yesterday from the previous day’s $464 million, data from the Philippine Dealing System showed.
“The peso appreciated due to weaker- than- expected US data on existing home sales and manufacturing,” a trader said yesterday.
“Many still remained on the sidelines ahead of Yellen’s speech [today],” the trader added, referring to US Federal Reserve Chairman Janet L. Yellen’s closelywatched remarks at the central bank’s annual symposium in Jackson Hole, Wyoming.
Another trader said via phone that “the peso edged higher after disappointing US home resales dimmed investors outlook of a rate hike in the US soon.”
Existing-home sales decreased 3.2% last month from June to a seasonally adjusted annual rate of 5.39 million, the National Association of Realtors said Wednesday. The decrease was the first since February. Economists had expected a July sales pace of 5.52 million. Compared to a year earlier, July sales were down 1.6%.
For today, a trader said expectations of a rebound in US durable goods orders might cause the peso to depreciate. The dollarpeso pair is seen moving within the P46.30 to P46.60 range today, one trader said, while another trader put the support at P46.20 and resistance at P46.50.
Most Asian currencies also rose on Thursday but uncertainty about what signals Fed’s Ms. Yellen will send on US interest rates in a keenly-awaited speech kept gains modest.