Jnews is about news!
Free Guest post from High DA(56) Site - A high authrority guest post -DA 56- absolutely free | Product Hunt

Peso may continue to strengthen against the dollar ahead of key data

THE PESO is expected to strengthen versus the dollar this week ahead of the release of the latest Philippine manufacturing data and expectations of easing inflation.

The local unit closed at P56.67 per dollar on Friday, strengthening by 11 centavos from its P56.78 finish on Thursday. 

Week on week, the peso appreciated by 59 centavos from its P57.26 close versus the dollar on Nov. 18.

The peso opened Friday’s trading session at P56.73 per dollar. Its weakest showing was at P56.84, while its intraday best was at P56.65 against the greenback.

Dollars exchanged decreased to $849 million on Friday from the $868.5 million seen on Thursday.

The peso strengthened on Friday after the release of strong “hot money” data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail.

Foreign portfolio investments posted a net inflow of $83 million in October, a turnaround from the $367.3-million net outflow seen in September.

It was also a reversal of the $221.11-million net outflow in the same month a year ago.

Mr. Ricafort said the local currency was also supported by gains at the local stock market on Friday.

The benchmark Philippine Stock Exchange index rose by 76.43 points or 1.17% to close at 6,606.94 on Friday. This marked the fourth straight day that Philippine shares ended in the green.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail that the minutes of the US Federal Reserve’s latest meeting also affected peso-dollar trading.

Minutes of the Fed’s policy meeting this month showed that a “substantial majority” of policy makers agreed that it would slow the pace of rate hikes for the remainder of the year.

The US central bank has raised rates by 375 bps since March, bringing the fed funds rate to a 3.75-4% range.

The Fed will next update its interest rate and economic forecasts at their policy meeting on Dec. 13-14.

For this week, industry players will watch out for the release of the S&P Global Philippines Manufacturing Purchasing Managers’ Index report on Dec. 1, Mr. Ricafort said.

Mr. Asuncion said the market is also waiting for latest data to see if inflation has peaked to help sustain the recovery of local risk appetite.

Philippine headline inflation accelerated to a near 14-year high of 7.7% in October.

In the first 10 months, inflation averaged 5.4%, still lower than the central bank’s 5.6% full-year forecast but higher than its 2-4% target.

November inflation data will be released by the Philippine Statistics Authority on Dec. 6.

Mr. Ricafort gave a forecast range of P56.30 to 56.90, while Mr. Asuncion expects the local unit to move within a weaker range of P56.70 to P57 per dollar. — Luisa Maria Jacinta C. Jocson

Leave a Reply

Your email address will not be published. Required fields are marked *