The peso bounced back against the dollar on Thursday on expectations of softer US consumer inflation data.
The local unit closed at PHP 55.95 per dollar on Thursday, strengthening by 32.5 centavos from its PHP 56.275 finish on Wednesday, based on Bankers Association of the Philippines data.
The peso opened Thursday’s session slightly stronger at PHP 56.20 against the dollar. Its intraday best was at P55.93, while its worst showing was at PHP 56.22 versus the greenback.
Dollars exchanged declined to USD 1.91 billion on Thursday from USD 2.55 billion on Wednesday.
The peso appreciated against the dollar amid expectations of a weaker US consumer inflation report, Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.
“The peso rebounded strongly at the PHP 55 level amid expectations of weaker US consumer inflation reports,” a trader likewise said in an e-mail.
The dollar drifted lower in Asia on Thursday as traders waited on US inflation data to see whether bets on as many as five US Federal Reserve interest rate cuts this year were justified, Reuters reported.
The dollar index fell 0.1% to 102.23.
Market attention has zeroed in on the US consumer price index report (CPI) due later on Thursday. Core CPI is forecast to remain unchanged at 0.3% from the month before, while year-on-year inflation is expected to slow to 3.8% from November’s 4%, a Reuters poll showed.
For Friday, the trader expects the peso to move between PHP 55.85 and PHP 56.10 per dollar, while Mr. Roces said the local currency could be mostly range-bound. — A.M.C. Sy with Reuters