The PESO could move sideways against the dollar this week following stronger-than-expected US data and as the market awaits the release of key economic reports in the coming days.
The local unit ended the shortened trading week at P58.20 per dollar on Friday, weakening 29 centavos from Thursday’s P57.91, data from the Bankers Association of the Philippines showed. The Philippine financial markets were closed for holidays on December 30, December 31 and January 1.
Week on week, the peso fell by 35.5 centavos from the P57.845 per dollar on December 27.
The peso fell on Friday after strong initial jobless benefits data in the US, a trader said in a telephone interview.
The local unit weakened against a broadly stronger dollar on expectations that the U.S. Federal Reserve will remain aggressive, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort. in a Viber message.
For this week, key market drivers will be the latest U.S. nonfarm payrolls data, as well as the Philippine inflation report for December and full-year 2024, the trader said.
The trader sees the peso moving between P58 and P58.40 per dollar this week, while Mr. Ricafort expects it to fluctuate between P57.90 and P58.40.
The number of Americans filing new claims for unemployment benefits fell two weeks ago to the lowest level in eight months, pointing to low layoffs by the end of 2024 and consistent with a healthy labor market, Reuters reported.
Thursday’s Labor Department report added to a recent string of upbeat economic data, including consumer spending, reinforcing Federal Reserve forecasts for fewer interest rate cuts this year. The resilience of the labor market keeps economic expansion on track.
Initial jobless claims fell by 9,000 to a seasonally adjusted 211,000 for the week ended December 28, the lowest level since April. Economists polled by Reuters had forecast 222,000 claims for the past week. — AMCS of Reuters