Peso rebounds before key US data

The peso strengthened anew against the dollar on Tuesday ahead of the release of the November US consumer inflation data overnight.

The local unit closed at PHP 55.57 per dollar on Tuesday, rising by eight centavos from the near one-month low finish of PHP 55.65 on Monday, data on the Bankers Association of the Philippines’ website showed.

The peso opened Tuesday’s session stronger at PHP 55.60 against the dollar. Its intraday best was at PHP 55.55, while its weakest showing was at PHP 55.65 versus the greenback.

Dollars exchanged rose to USD 1.005 billion on Tuesday from USD 888.88 million recorded on Monday.

“The peso appreciated amid potentially a softer US consumer inflation report for November 2023,” a trader said in an e-mail.

The dollar slightly ahead of the release of November US consumer inflation data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The November US consumer price index (CPI) report was set to be released overnight.

In October, the US CPI was unchanged for the first time in more than a year following a 0.4% rise in September.

In the 12 months through October, the CPI was up by 3.2% after climbing by 3.7% in September.

The peso was also supported by the rollback in local fuel and energy prices, as it could help bring down inflation to the Bangko Sentral ng Pilipinas’ (BSP) 2-4% annual target, Mr. Ricafort added.

Headline inflation rose by 4.1% year on year in November, easing from the 4.9% in October and 8% in November 2022.

This was the slowest rate in 20 months or since the 4% seen in March 2022.

In the 11 months through November, headline inflation averaged 6.2%, faster than 5.6% in the same period last year. This is still above the BSP’s 2-4% goal.

For Wednesday, the trader said the peso could climb further as the Federal Reserve starts its two-day policy meeting.

The trader sees the peso moving between PHP 55.40 and PHP 55.64 per dollar on Wednesday, while Mr. Ricafort expects it to range from PHP 55.45 to PHP 55.65.