Peso may strengthen vs dollar

The peso could strengthen slightly against the dollar this week on bets of a rate hike from the Bangko Sentral ng Pilipinas’ (BSP) hawkish stance following faster September inflation.

The local unit closed at PHP 56.62 per dollar on Friday, strengthening by five centavos from its PHP 56.67 finish on Thursday, data from the Bankers Association of the Philippines showed.

Week on week, however, the peso weakened by 4.5 centavos from its PHP 56.575 per dollar finish on Sept. 29.

The local currency opened Friday’s session at PHP 56.64 against the dollar. Its weakest showing was at PHP 56.66 while its intraday best was at PHP 56.56 versus the greenback.

Dollars exchanged went down to USD 1.08 billion on Friday from USD 1.23 billion on Thursday.

The peso strengthened on Friday after global crude oil prices continued to decline to new one-month lows, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For this week, the peso could inch up against the dollar amid hawkish BSP bets, Mr. Ricafort said.

BSP Governor Eli M. Remolona, Jr. previously said he is open to an off-cycle rate hike before the Monetary Board’s Nov. 16 meeting if inflation risks persist.

Headline inflation picked up to a three-month high of 6.1% in September from 5.3% in August, but was slower than the 6.9% print in the same month last year.

For the first nine months, the consumer price index averaged 6.6%, above the BSP’s 5.8% forecast for the year.

For this week, Mr. Ricafort sees the peso ranging from PHP 56.45 to PHP 56.85 per dollar. — AMCS