The peso gained against the dollar on Tuesday after headline inflation eased to an over three-year low in January.
The local unit closed at PHP 56.20 per dollar on Tuesday, rising by nine centavos from its PHP 56.29 finish on Monday, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s session lower at PHP 56.37 against the dollar. Its intraday best was at PHP 56.14, while its weakest showing was at PHP 56.39 versus the greenback.
Dollars traded went up to USD 1.26 billion on Tuesday from USD 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 PHP 56.10 and PHP 56.35 per dollar on Wednesday, while Mr. Ricafort sees the local unit ranging from PHP 56.10 to PHP 56.30. — A.M.C. Sy