Peso ends week lower on strong US economic data
THE PESO ended the week lower against the dollar, tracking the direction of its regional peers and after key US data came out better than market expectations.
The currency finished at P50.65 on Friday, 12 centavos weaker than its P50.53 finish on Thursday.
The peso opened the session at its high of of P50.55. The intraday low was P50.665 near the close of the session.
Traders attributed the peso’s slump to upbeat US economic data, specifically the producer price index (PPI) and jobless claims.
“The peso depreciated today, as US producer prices increased by a larger amount than expected, supporting the view of more rate hikes ahead,” one trader said by email on Friday.
A second trader said: “We saw a slight recovery for the dollar against the peso because [the other night,] there were some US indicators -- the PPI as well as unemployment claims -- the came out better than market expectations.”
The trader added the peso continued to trade lower intraday on Friday after the Bangko Sentral ng Pilipinas (BSP) was absent from the market and did not provide liquidity during the session.
“We saw BSP agent banks were missing and the market was still biddish at the P50.60 levels. With thin liquidity, market was buying the pair,” the trader said.
The BSP sometimes intervenes in currency trading to temper any sharp swings in the peso.
“The peso’s drop was capped by increased caution on the market ahead of the US inflation report tonight,” this trader noted.
A third trader attributed the peso’s decline against the dollar to consolidation with the peso tracking the direction of its regional peers.
“We opened flat in the morning, a little higher and then the dollar in Asia recovered so we traded a bit higher. We were still pretty much stuck in consolidation,” the trader said, noting it was a “very quiet day.” -- Janine Marie D. Soliman