![](https://investingbusinessdaily.com/wp-content/uploads/2024/02/Peso-currency-300x200-wVVVlt.jpeg)
Peso could remain range-bound ahead of Fed minutes
THE PESO could trade sideways against the dollar this week before the release of minutes of the US Federal Reserve’s January meeting.
The local unit closed at P55.96 per dollar on Friday, up by six centavos from its P56.02 finish on Thursday, Bankers Association of the Philippines data showed.
Week on week, however, the peso weakened by 4.9 centavos from its P55.911 finish on Feb. 08.
The peso opened Friday’s session stronger at P55.93 against the dollar. Its weakest showing was at P56.02, while its intraday best was at P55.90 versus the greenback.
Dollars exchanged went down to $952.2 million on Friday from $958.68 million on Thursday.
The peso strengthened on Friday as the dollar weakened due to softer-than-expected US retail sales data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
US retail sales fell more than expected in January, pulled down by declines in receipts at auto dealerships and gasoline service stations, Reuters reported.
Retail sales dropped by 0.8% last month, the Commerce department’s Census Bureau said on Thursday, also likely weighed down by winter storms. Data for December was revised lower to show sales rising 0.4% instead of 0.6% as previously reported. Economists polled by Reuters had forecast retail sales dipping 0.1%.
For this week, the peso could trade sideways against the dollar ahead of the release of minutes of the Fed’s Jan. 30-31 meeting on Wednesday, Mr. Ricafort said.
The US central bank held its target rate steady at the 5.25-5.5% range for a fourth straight time during its meeting last month. It raised borrowing costs by 525 basis points from March 2022 to July 2023.
The stronger-than-expected US producer price index (PPI) data released on Friday could also affect the peso, Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.
US producer prices increased more than expected in January amid strong gains in the costs of services such as hospital outpatient care and portfolio management, Reuters reported.
The increase reported by the Labor department on Friday was the largest in five months. The report followed on the heels of an above-expectations rise in consumer prices in January and prompted financial markets to dial back expectations that the Federal Reserve would start cutting interest rates in June.
The PPI for final demand rose by 0.3% last month, the largest increase since August 2023, after declining by a revised 0.1% in December, the Labor department’s Bureau of Labor Statistics said. Economists polled by Reuters had forecast the PPI gaining by 0.1% following a previously reported 0.2% drop.
In the 12 months through January, the PPI increased by 0.9% after climbing by 1% in December.
Mr. Ricafort sees the peso ranging from P55.70 to P56.20 per dollar this week, while Mr. Roces expects it to move between P55.70 and P56.10 against the greenback. — AMCS with Reuters