Peso weakens before Q2 GDP data

The peso weakened anew against the dollar on Thursday as sentiment turned cautious before the release of second-quarter Philippine gross domestic product (GDP) and US labor data.

The currency dropped by 6.4 centavos to close at PHP 60.815 versus the greenback from its PHP 60.751 finish on Wednesday, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Thursday’s session stronger at PHP 60.68. It climbed to a high of PHP 60.58, while its intraday low was at PHP 60.835 versus the greenback.

Dollars exchanged went down to USD 2.04 billion from USD 2.17 billion.

“The peso initially went to lows of PHP 60.58, tracking dollar weakness following weak ADP National Employment Report numbers, but strong buying pressure ahead of NFP (nonfarm payrolls) data tonight pushed the pair to a high PHP 60.835 before closing at PHP 60.815,” a trader said by phone.

Expectations of weaker Philippine GDP growth for the second quarter also weighed on the peso, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. The Philippine Statistics Authority will release the GDP report on Friday (Aug. 7).

A BusinessWorld poll of 21 economists yielded a median GDP growth estimate of 2.8% for the April-to-June period. This would match the first-quarter pace but be much slower than the 5.4% expansion in the same period last year.

This would be below the government’s 3.5%-4.5% full-year target.

For Friday, the trader sees the peso moving between PHP 60.50 and PHP 60.90 per dollar, while Mr. Ricafort said it may range from PHP 60.70 to PHP 60.90. — Aaron Michael C. Sy