Peso inches up before US PCE price index data
THE PESO inched up against the dollar on Tuesday as the market awaited the release of US personal consumption expenditures (PCE) price index report, as it could affect the US Federal Reserve’s policy stance.
The local unit closed at P56.08 per dollar on Tuesday, strengthening by 1.5 centavos from its P56.095 finish on Monday, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s session slightly weaker at P56.10 against the dollar. Its worst showing was at P56.175, while its intraday best was at P56.04 versus the greenback.
Dollars exchanged rose to $1.74 billion on Tuesday from $982.3 million on Monday.
The peso inched up against the dollar as the market looked ahead to the release of the US PCE price index report, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The peso-dollar pair was in consolidation mood as market waits for further data later this week, chief of which is the PCE data from the US. Seems the bias is to trade the range for now prior to the data,” Security Bank Corp. Chief Economist Robert Dan J. Roces likewise said in a Viber message.
The dollar was also generally weaker against other currencies on Tuesday due after US President Joseph R. Biden, Jr. signaled a possible ceasefire between Israel and Hamas, Mr. Ricafort added.
The dollar traded on the back foot on Tuesday, as markets looked ahead to a week of US economic data that will provide fresh signals on how soon the Federal Reserve may begin cutting interest rates, Reuters reported.
The US dollar index, which measures the currency against a basket of peers including the yen, euro and sterling, traded flat at 103.77 in Asian time, following a 0.17% slide on Monday.
Markets have all but ruled out a cut at the Fed’s March meeting and have recently pushed back expectations for a cut to June from May, CME’s FedWatch Tool showed, following strong US consumer and producer price data.
US durable goods data is due later on Tuesday, while January’s US PCE price index, which is the Fed’s preferred measure of inflation, will be released on Thursday.
The dollar slipped 0.12% to 150.505 yen, with new figures showing consumer inflation stayed at the Bank of Japan’s 2% target in January, rather than dipping below it for the first time in nearly two years, as economists had predicted.
For Wednesday, Mr. Ricafort expects the peso to range from P55.95 to P56.15 per dollar, while Mr. Roces sees it moving between P55.70 and P56.20 for the whole week. — AMCS with Reuters