Peso inches lower vs dollar

The peso inched down against the dollar on Monday as investors were cautious ahead of the release of August US consumer price index (CPI) data this week.

The local currency closed at PHP 56.69 versus the dollar on Monday, weakening by six centavos from Friday’s PHP 56.63 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Monday’s session flat at PHP 56.63 per dollar. Its intraday best was at PHP 56.53, while its weakest showing was at PHP 56.695 against the greenback.

Dollars traded went down to USD 1.19 billion on Monday from the USD 1.62 billion on Friday.

“The peso weakened amid market caution prior to the release of the US consumer inflation report for August 2023,” a trader said in an e-mail.

August US CPI data will be released on Wednesday.

The peso inched down due to signals from the Bangko Sentral ng Pilipinas (BSP) that inflation could return to its 2-4% target in the first quarter next year instead of this year, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

BSP Governor Eli M. Remolona, Jr. last week said he expects inflation to be back within its target range early next year amid lingering price risks.

He added that the BSP could upwardly revise its full-year inflation forecast of 5.6% for 2023 at their Sept. 21 policy meeting.

For Tuesday, the trader said the peso could depreciate further ahead of key US data releases.

The trader sees the peso moving between USD 56.60 and USD 56.85 per dollar on Tuesday, while Mr. Ricafort sees it ranging from PHP 56.60 to PHP 56.80. — AMCS