PHL, US inflation to drive peso trade
THE PESO will move sideways against the dollar this week, with local and US inflation data to be the main trading drivers, analysts said.
The local unit closed at P58.51 per dollar on Friday, strengthening by 12.5 centavos from its P58.635 finish on Thursday, Bankers Association of the Philippines data showed.
Week on week, however, the peso depreciated by 32 centavos from its P58.19 finish on May 24.
Mixed US data led to lower Treasury yields, resulting in a generally weaker dollar on Friday, Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.
Softer US gross domestic product growth, pending home sales, and other data could support a rate cut by the US Federal Reserve and the Bangko Sentral ng Pilipnas (BSP), Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“Going forward, the peso’s performance would partly be a function of defense, as consistently seen over the past 1.5 years,” he added.
For this week, Mr. Roces said the peso will move depending on the May Philippine consumer price index (CPI) data to be released on Wednesday, June 5.
A BusinessWorld poll of 16 analysts conducted last week yielded a median estimate of 4% for the May CPI, within the BSP’s 3.7-4.5% forecast for the month.
If realized, this would be faster than the 3.8% print in April but slower than the 6.1% in the same month a year earlier.
Investors will also price in the April US personal consumption expenditures price index report released last Friday, Mr. Roces added.
Mr. Ricafort sees the peso moving between P58.20 and P58.70 per dollar this week. — A.M.C. Sy