Peso jumps as weak US jobs data hit greenback

The peso appreciated on Monday as the dollar stayed under pressure, with weak US jobs data leading markets to recalibrate the US Federal Reserve rate hike calls.

The currency jumped by 19.5 centavos to close at PHP 60.705 versus the greenback from its PHP 60.90 finish on Friday, based on data from the Bankers Association of the Philippines’ website.

The local unit opened Monday’s session stronger at PHP 61.85 per dollar, which was already its weakest showing against the greenback. Its intraday best was its closing value of PHP 60.705.

Dollars exchanged went down to USD 1.47 billion from USD 1.84 billion.

“The peso strengthened after the softer US jobs report eased market expectations of a potential US rate hike in September,” the first trader said in an e-mail.

The peso closed lower, tracking the dollar’s correction on Friday after US nonfarm payrolls came in lower, pushing back Fed hike bets, a second trader likewise said by phone. The trader added that players are awaiting the release of the latest US inflation data that could also affect the central bank’s policy stance.

The currency was also supported by Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. saying on Monday that they are ready tighten their policy stance further to bring down inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Tuesday, the first trader said the peso could continue to gain ground ahead of likely slower US inflation data due out this week, while the second trader said players will continue to track developments in the Middle East.

The first trader sees the peso moving between PHP 60.55 and PHP 60.80 against the dollar on Tuesday, while the second trader expects it to range from PHP 60.50 to PHP 60.90. Mr. Ricafort sees the currency trading from 61.60 to 61.80. — Aaron Michael C. Sy