Peso to move sideways ahead of data releases

THE PESO is expected to move sideways to start 2023 as the market waits for leads.

The local currency closed at PHP 55.755 versus the greenback on Dec. 29, up by 44.50 centavos from its PHP 56.20 finish on Dec. 28, data from the Bankers Association of the Philippines showed.

Week on week, the peso weakened by 60.50 centavos from its PHP 55.15-a-dollar finish on Dec. 23.

Philippine financial markets were closed on Dec. 30 and Jan. 2 due to official holidays.

For this week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the market will take its cue from economic data to be released this week.

These reports include the December 2022 manufacturing purchasing managers’ index to be released on Jan. 3, the December 2022 consumer price index (Jan. 5), the November 2022 Monthly Integrated Survey of Selected Industries (Jan. 6) and December 2022 gross international reserves data (Jan. 6), Mr. Ricafort said.

Philippine headline inflation is seen to have settled within the 7.8% to 8.6% range in December due to higher electricity rates and rising prices of agricultural goods, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.

If realized, December would mark the ninth straight month that inflation surpassed the BSP’s 2-4% target range.

Mr. Ricafort added that the “tail-end of the seasonal surge in OFW (overseas Filipino workers) remittances and conversion to pesos to finance the seasonal increase in holiday spending” could also affect peso-dollar trading this week.

He said the local currency may move between PHP 55.55 and PHP 56.05 per dollar this week.