Peso slips ahead of data

Business World - - BANKING & FINANCE - T. Lopez Melissa Luz

THE PESO snapped its week­long rally ver­sus the dol­lar as it re­sumed trad­ing yes­ter­day as sen­ti­ment to­wards the United States re­cov­ered, and ahead of the re­lease of in­fla­tion data which could dic­tate the next moves of the Fed­eral Re­serve.

The lo­cal unit closed at P50.975 against the green­back on Wed­nes­day, down by seven cen­tavos from the P50.905 fin­ish on Mon­day.

Yes­ter­day’s close was the weak­est logged since a P51.095 ex­change rate on Sept. 6.

Fi­nan­cial mar­kets were closed on Tues­day af­ter Mala­cañang sus­pended work in govern­ment of­fices in Metro Manila due to heavy rains brought about by ty­phoon Lan­nie ( in­ter­na­tional name: Talim) and trop­i­cal storm Mar­ing ( Dok­suri). The Bangko Sen­tral ng Pilip­inas sus­pended all trad­ing, clear­ing, and set­tle­ment trans­ac­tions fol­low­ing the dec­la­ra­tion.

Trad­ing re­sumed on Wed­nes­day with the peso open­ing weaker at P50.98 against the green­back. It touched P51.04 as its in­tra­day low, while P50.90 was its best show­ing for the day.

Two traders at­trib­uted the side­ways move­ment of the peso to mar­ket an­tic­i­pa­tion ahead of key de­vel­op­ments in the global fi­nan­cial mar­kets later this week, while not­ing that the de­pre­ci­a­tion of the peso came as the dol­lar bounced back from last week’s lows.

“The dol­lar con­tin­ues to re­cover. I think the ten­sion be­tween North Korea and the US is eas­ing, and also the im­pact of Hur­ri­cane Irma was not as strong as ex­pected. We saw a cor­rec­tion as ma­jor cur­ren­cies traded higher ver­sus the dol­lar,” one trader said in a phone in­ter­view.

“Once the peso breached the P51 fig­ure, profit tak­ing took place.”

The trader said the peso sim­ply con­sol­i­dated, ahead of some spec­u­la­tion that the Bank of Eng­land might hike rates at its pol­icy meet­ing later this week.

A sec­ond trader said the peso sim­ply moved side­ways yes­ter­day as it had no new leads to ride on, with mar­ket play­ers on a wai­t­and-see mode ahead of US in­fla­tion data due on Thurs­day.

The turnout of US in­fla­tion will pro­vide some hints whether the Fed can still pro­ceed with a third rate hike within the year, with mar­ket watch­ers now see­ing a slim chance for an­other round of pol­icy tight­en­ing by De­cem­ber.

Both traders said there were no signs that the Bangko Sen­tral ng Pilip­inas in­ter­vened dur­ing yes­ter­day’s ses­sion, which saw the peso close a few cen­tavos be­low P51.

Dol­lars traded yes­ter­day to­talled $ 610.4 mil­lion, higher than the $436 mil­lion which ex­changed hands on Mon­day but hit­ting the av­er­age vol­ume seen daily.

For to­day, the two traders ex­pect the peso to trade be­tween P50.90-P51.10, mov­ing side­ways un­til the mar­ket re­ceives key data which will be re­flected dur­ing Fri­day’s ses­sion.

THE PESO dropped ahead of US in­fla­tion data, which could give hints on the US Fed­eral Re­serve’s next move.

Newspapers in English

Newspapers from Philippines

© PressReader. All rights reserved.