Peso rebounds as traders await data, peace deal

The peso recovered against the dollar on Tuesday as focus turned to upcoming data releases here and abroad that are expected to reflect the continued economic impact of the Middle East crisis.

The currency gained 7.10 centavos to close at PHP 61.675 versus the greenback from PHP 61.746 on Monday, according to Bankers Association of the Philippines data posted on its website.

The local unit opened Tuesday’s session nearly flat at PHP 61.74 per dollar against the greenback. It traded within a tight range, with its high at just PHP 61.65 and its intraday low at its record-low close of PHP 61.75 against the greenback.

Dollars traded rose to USD 1.299 billion on Tuesday from USD 998.92 million on Monday.

“The dollar-peso closed lower as the market consolidated within a narrow range, most likely on cautious trading ahead of key data releases both locally and in the US,” a trader said in a phone interview. These data include reports on May Philippine inflation and US employment.

A BusinessWorld poll of 16 economists yielded a median estimate of 7.9% for the May consumer price index, up from 7.2% in April and 1.3% in the same month last year.

The trader added that the market continues to monitor developments between the United States and Iran.

Lower global crude oil prices amid the US-Iran ceasefire also supported the peso, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

He added that the local unit may have also stayed below its all-time low due to intervention from the central bank. The Bangko Sentral ng Pilipinas has said that they intervene in the foreign exchange market to prevent sharp, inflationary swings, but do not have a target level for the currency.

For Wednesday, the trader sees the peso ranging from PHP 61.50 to PHP 61.75 a dollar, while Mr. Ricafort expects it to move between PHP 61.55 and PHP 61.75. — A.M.C. Sy