Peso inches up on easing inflation
THE PESO rose against the dollar on Tuesday after headline inflation slowed further in November.
The local unit closed at P55.32 per dollar on Tuesday, strengthening by two centavos from its P55.34 finish on Monday, based on Bankers Association of the Philippines data.
This was the peso’s strongest close since its P55.19 per dollar finish on Aug. 2.
The peso opened Tuesday’s session weaker at P55.40 against the dollar. Its intraday best was at P55.295, while its worst showing was at P55.445 versus the greenback.
Dollars exchanged rose to $1.35 billion on Tuesday from $1.11 billion on Monday.
The peso appreciated against the dollar after the release of data showing that inflation eased in November, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Headline inflation slowed to 4.1% in November from 4.9% in October and 8% in November 2022. This was within the Bangko Sentral ng Pilipinas’ (BSP) 4-4.8% forecast but below the median estimate of 15 economists in a BusinessWorld poll conducted last week.
However, November marked the 20th straight month inflation was above the BSP’s 2-4% target.
Year to date, inflation averaged 6.2%, faster than 5.6% in the same period last year.
The peso rose following softer US economic data recently, which may support a continued pause in the US Federal Reserve’s tightening cycle as well as a potential rate cut next year, Mr. Ricafort added.
The US central bank kept the fed funds rate steady at the 5.25%-5.5% range for a second straight time during its Oct. 31-Nov. 1 meeting.
It has hiked rates by a cumulative 525 basis points since it began its tightening cycle in March 2022.
The Fed will hold its last policy meeting for the year on Dec. 12-13.
For Wednesday, Mr. Ricafort expects the peso to range from P55.22 to P55.42 per dollar. — AMCS