Peso edges up versus dollar ahead of US labor data

The Philippine peso inched higher against the dollar on Wednesday as investors positioned ahead of September US labor data, which could influence expectations for another interest rate cut by the US Federal Reserve.

It closed at PHP 58.935 a dollar, up five centavos from Tuesday’s PHP 58.985, based on Bankers Association of the Philippines data posted on its website. It opened at PHP 58.95, swinging between PHP 58.82 and PHP 58.955 during the session.

Dollar turnover reached USD 1.39 billion, slightly below Tuesday’s USD 1.46 billion.

“The peso continued to gain on expectations of continued weakness in the soon-to-be-released September US labor report,” a trader said in an e-mailed reply to questions.

Investors are closely watching the Fed as it begins receiving updated economic data from the recently reopened federal government.

Policymakers are seeking clarity for their debate on whether to cut rates at the December meeting, just over three weeks away. However, the timeline for the release of employment, inflation, retail spending and growth data remains uncertain.

The Bureau of Labor Statistics said the delayed September employment report would be published on Thursday, while some October data might be skipped entirely, and November reports could face delays after the mid-month government shutdown.

The Fed last month lowered borrowing costs by 25 basis points, bringing its policy rate to 3.75-4%, the second cut this year. Since its easing cycle began in September 2024, total reductions have reached 150 bps, fueling market bets on additional easing.

The peso also drew support from signals of intervention by the Bangko Sentral ng Pilipinas (BSP), Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

BSP Governor Eli M. Remolona, Jr. said the central bank has been active in the foreign exchange market, but only to temper any prolonged depreciation that could affect inflation.

Looking ahead, the peso may face mixed pressures. A weak US jobs report could reinforce expectations of further Fed rate cuts, supporting the peso, while global volatility could offset some gains.

The trader expects the peso to trade from PHP 58.80 to PHP 59.05 a dollar on Thursday, a range echoed by Mr. Ricafort, reflecting continued caution amid uncertain US data and central bank interventions. — A.M.C. Sy