Currencies 2 MIN READ

Peso may trade sideways

September 11, 2023By BusinessWorld

The peso could trade sideways against the dollar this week ahead of the release of US inflation data that could affect the US Federal Reserve’s next policy move.

The local unit closed at PHP 56.63 versus the dollar on Friday, strengthening by 16 centavos from Thursday’s PHP 56.79 finish, data from the Bankers Association of the Philippines’ website showed.

Week on week, however, the peso inched down by 3.50 centavos from its P56.595 close on Aug. 30.

The local unit opened Friday’s session at PHP 56.74 per dollar. Its weakest showing was at PHP 56.785, while its intraday best was at PHP 56.56 against the greenback.

Dollars traded rose to USD 1.62 billion on Friday from USD 1.45 billion on Thursday.

The peso appreciated on Friday following the dollar’s slight decline in Asian trading, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For this week, the peso could move sideways against the dollar as the market awaits the release of August US consumer and producer inflation data, which could affect the Fed’s decision this month, Mr. Ricafort said.

The US central bank raised borrowing costs by 25 basis points (bps) last month, bringing its target rate to a range between 5.25% and 5.5%.

It has hiked rates by 525 bps since it began its tightening cycle in March last year.

The Federal Open Market Committee will hold its policy meeting on Sept. 19-20.

For this week, Mr. Ricafort expects the peso to range from PHP 56.30 to PHP 56.80 per dollar. — AMCS

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