The PESO could continue to rise against the dollar this week amid rate cuts at home and abroad due to slower-than-expected Philippine headlines in the US economy.Fin June and data pointing to a cooling US labor market.
The local unit closed at P58.53 per dollar on Friday, up five centavos from P58.58 on Thursday, data from the Bankers Association of the Philippines showed.
This was the peso’s strongest exchange rate in almost a month or since its rate of P58.52 per dollar Fready on June 7.
Week on week, the peso also rose by eight centavos from its closing rate of P58.61 per dollar on June 28.
Slower Philippine June intoFThe economy supported the peso on Friday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said. in a Viber message.
June’s consumer price index (CPI) strengthened the case for a rate cut by the Bangko Sentral ng Pilipinas (BSP) by next month, Security Bank Corp. chief economist Robert Dan J. Roces said. in a Viber message.
Headline inflation fell to an annual rate of 3.7% in June, compared with 3.9% in May and 5.4% in the same month a year ago, the Philippine Statistics Authority said on Friday.
This was within the BSP’s 3.4-4.2% forecast for the month and slightly slower than the average estimate of 3.9% in a Business poll among 14 analysts. This was also the seventh month in a row that the CPI remained within the BSP’s annual target of 2-4%.
June’s CPI matched March’s 3.7% and was the slowest in four months or since the 3.4% recorded in February.
For the FIn the first half, Philippine headline inflation averaged 3.5%, above the central bank’s 3.3% annual forecast but still within the annual target of 2-4%.
BSP Governor Eli M. Remolona, jr. previously said the Monetary Board is “on track” and “slightly more likely than before” to cut rates at its Aug. 15 policy meeting, as it expects inflation to ease further this semester with the introduction of lower rates.Ffs on rice.
This week, the peso’s move against the dollar will be driven by U.S. nonfarm payrolls data released Friday, Mr. Roces said.
US employment rose solidly in June, but government and health care hiring accounted for about three-quarters of wage growth and the unemployment rate reached a 2.5-year high of 4.1%, indicating on a weakening labor market that maintains employment. The Federal Reserve is on track to cut interest rates soon, Reuters reports.
Mr. Ricafort added that the market will also be watching U.S. consumers and producers in JuneFThe figures released this week, as well as Fed Chairman Jerome H. Powell’s semi-annual testimony before the US Congress, could provide hints about the US central bank’s policy trajectory.
He expects the peso to move between P58.40 and P58.60 against the dollar this week. — AMCS of Reuters