Peso inches down before key US data

The peso inched down against the dollar on Thursday ahead of the release of key US economic data.

The local unit closed at PHP 55.40 per dollar on Thursday, weakening by less than a centavo from its PHP 55.396 finish on Wednesday, Bankers Association of the Philippines data showed.

The peso opened Thursday’s session slightly stronger at PHP 55.37 against the dollar. Its weakest showing was at PHP 55.44, while its intraday best was at PHP 55.36.

Dollars exchanged slipped to USD 868.8 million on Thursday from USD 1.01 billion on Wednesday.

The peso weakened before the release of US producer price index and retail sales data overnight and as global crude prices rose, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso slightly weakened ahead of a potentially robust US retail sales report overnight,” a trader said in an e-mail.

The dollar inched higher on Thursday as investors waited for US economic data later in the day, Reuters reported.

The dollar index, which gauges the currency against six major peers, rose 0.14% to 102.89.

It has largely shrugged off Tuesday’s hotter-than-expected US consumer inflation data and is roughly unchanged since the figures. The index is up around 1.5% this year as US data has shown that the economy remains strong, causing investors to rein in their bets on rapid and deep interest rate cuts. 

Data due at 1230 GMT (8.30 a.m. ET) — on producer inflation, retail sales and weekly jobless claims — could provide more clues about the timing of rate cuts.

Meanwhile, Brent rose four cents to USD 84.07 a barrel, while US crude was flat at USD 79.72 per barrel.

For Friday, the trader said the peso could weaken further due to expectations of a rate cut by China’s central bank.

The trader sees the peso moving between PHP 55.30 and PHP 55.55 per dollar, while Mr. Ricafort expects it to range from PHP 55.30 to PHP 55.50. — AMCS with Reuters