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Peso weakens as ADB cuts PHL growth forecast

THE PESO depreciated against the dollar on Wednesday after the Asian Development Bank (ADB) cut its economic growth forecast for the Philippines this year.

The local currency closed at P56.81 versus the dollar on Wednesday, weakening by 5.50 centavos from Tuesday’s P56.755 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Wednesday’s session at P56.70 per dollar, which was also its intraday best. Its weakest showing was at P56.824 against the greenback.

Dollars traded went down to $835.5 million on Wednesday from $1.17 billion on Tuesday.

The peso declined on Wednesday as the ADB slashed its growth forecast for the country, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

In its latest Asian Development Outlook report, the ADB trimmed its Philippine gross domestic product (GDP) growth forecast for this year to 5.7% from the 6% estimate it gave in April.

This is below the government’s 6-7% growth target.

The peso also depreciated due to a stronger dollar and global crude oil prices recently, Mr. Ricafort said.

“The peso depreciated due to some market caution ahead of the Federal Reserve policy decision overnight,” a trader added in an e-mail.

The Fed was set to announce its latest policy decision overnight after a two-day meeting.

The US central bank raised borrowing costs by 25 basis points (bps) in July, bringing its target rate to a range between 5.25% and 5.5%.

It has hiked rates by a cumulative 525 bps since it began its tightening cycle in March last year.

For Thursday, the trader said the peso could weaken further as the market will stay on the sidelines ahead of the Bangko Sentral ng Pilipinas’ own policy decision.

Both the trader and Mr. Ricafort see the peso ranging from P56.70 to P56.90 per dollar on Thursday. — AMCS

#Peso #weakens #ADB #cuts #PHL #growth #forecast

Peso rebounds as Fed seen to keep rates steady

THE PESO rebounded against the dollar on Tuesday on expectations that the US Federal Reserve would keep benchmark rates steady for the rest of the year.

The local currency closed at P56.755 versus the dollar on Tuesday, strengthening by 11.1 centavos from Monday’s P56.866 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Tuesday’s session stronger at P56.71 per dollar. Its intraday best was at P56.70, while its weakest showing was at P56.83 against the greenback.

Dollars traded rose to $1.17 billion on Tuesday from the $821.1 million on Monday.

The peso was supported by a weaker dollar recently as the US central bank could keep its key rate steady for the rest of the year, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The US dollar index hovered either side of unchanged at 105.04 on Tuesday due to hawkish expectations for the Fed, holding near last week’s six-month peak, Reuters reported.

A Reuters poll of 97 economists conducted on Sept. 7-12 showed 95%, or 94 economists, predicted the US central bank would hold the federal funds rate at the current 5.25%-5.5% during its Sept. 19-20 meeting.

The Fed raised borrowing costs by 25 basis points (bps) in July, bringing its target rate to a range between 5.25% and 5.5%.

It has hiked rates by a cumulative 525 bps since it began its tightening cycle in March last year.

The dollar was also weakened by expectations of a firmer European inflation data for August, a trader added in an e-mail.

In July, Eurozone consumer prices grew by 5.3% from 5.5% in June, extending a downward trend that started in the autumn. This was still above the European central bank’s 2% target.

For Wednesday, the trader said the peso could weaken as the Chinese central bank is not expected to cut its policy lending rates, which might drive demand for the greenback.

Both the trader and Mr. Ricafort expect the peso to move between P56.65 and P56.85 per dollar on Wednesday. — AMCS with Reuters

#Peso #rebounds #Fed #rates #steady

Peso down vs dollar on bets for US Fed holding key rate

THE PESO depreciated against the dollar on Monday on expectations that the US Federal Reserve will hold its key rate at its meeting this week.

The local currency closed at P56.866 versus the dollar on Monday, weakening by 5.1 centavos from Friday’s P56.815 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Monday’s session at P56.80 per dollar. Its intraday best was at P56.74, while its weakest showing was at P56.875 against the greenback.

Dollars traded fell to $821.1 million on Monday from the $1.06 billion on Friday.

The peso weakened due to expectations that the Fed will keep its benchmark rate steady in its meeting this week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso weakened further amid expectations of hawkish policy cues from the US Federal Reserve in their meeting this week,” a trader likewise said in an e-mail.

A Reuters poll of 97 economists conducted on Sept. 7-12 showed 95%, or 94 economists, predicted the US central bank would hold the federal funds rate at the current 5.25%-5.5% during its Sept. 19-20 meeting.

The Fed raised interest rates by 25 basis points (bps) last month, bringing its benchmark overnight rate to a range between 5.25% and 5.5%.

It has hiked rates by a cumulative 525 bps since it began its tightening cycle in March last year.

The peso was also dragged down by higher global crude oil prices on Monday, Mr. Ricafort added.

Reuters reported Brent crude futures rose 71 cents or 0.8% to $94.64 a barrel by 0622 GMT while US West Texas Intermediate crude futures were at $91.55 a barrel, up 78 cents or 0.9%.

Both benchmarks have climbed for three consecutive weeks to touch their highest levels since November and are on track for their biggest quarterly increase since Russia’s invasion of Ukraine in the first quarter of 2022.

For Tuesday, the trader said the peso could recover due to a potentially stronger euro zone inflation report.

The trader sees the peso moving between P56.70 and P56.90 per dollar on Tuesday, while Mr. Ricafort expects it to range from P56.75 to P56.95. — Aaron Michael C. Sy

#Peso #dollar #bets #Fed #holding #key #rate

Peso seen to trade sideways ahead of rate-setting moves

THE PESO could trade sideways versus the dollar this week ahead of the rate-setting meetings by the US Federal Reserve and by the Bangko Sentral ng Pilipinas (BSP).

The local unit closed at P56.815 versus the dollar on Friday, weakening by five centavos from Thursday’s P56.765 finish, data from the Bankers Association of the Philippines’ website showed.

Week on week, the peso likewise fell by 18.50 centavos from its P56.63 close on Sept. 8.

The local unit opened Friday’s session at P56.78 per dollar, which was also its intraday best. Its weakest showing was at P56.90 against the greenback.

Dollars traded rose to $1.06 billion on Friday from $1.17 billion on Thursday.

The peso weakened against the dollar on Friday “after mostly stronger US retail sales and US producer price index (PPI) data that could support the higher-for-longer Fed rates narrative,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“[The] US dollar strengthened against most currencies [on Friday] following resilient US economic data,” a trader added in a Viber message.

The dollar index surged to a six-month high on Thursday as economic data was mostly stronger than expected, hitting the 105.43 level earlier in the day, its highest since March 9.

The index was on track for its biggest one-day percentage gain in just over a week, Reuters reported.

Retail sales rose by 0.6% last month. Data for July was revised lower to show sales advancing 0.5% instead of the previously reported 0.7%. Economists polled by Reuters had forecast retail sales gaining 0.2%. Retail sales are mostly goods and are not adjusted for inflation. They rose 2.5% on a year-on-year basis.

Meanwhile, the producer price index (PPI) for final demand rose 0.7% last month, the largest gain since June 2022, the Labor department said on Thursday. Data for July was revised slightly to show the PPI advancing 0.4% instead of the previously reported 0.3%.

Higher global crude oil prices recently and losses at the local stock market also dragged down the peso, Mr. Ricafort added.

Brent crude futures rose by 23 cents or 0.3% to settle at $93.93 a barrel, while US West Texas Intermediate futures were up 61 cents or 0.7% to close at $90.77 a barrel. Both contracts traded at 10-month highs on Tuesday for the fifth consecutive session and gained about 4% on a weekly basis.

Meanwhile, the benchmark Philippine Stock Exchange index (PSEi) went down by 82.06 points or 1.32% to end at 6,126.34 on Friday, while the broader all shares index dipped by 33.13 points or 0.99% to close at 3,320.18.

The PSEi on Wednesday sank to the 6,100 level due to concerns about US inflation. This was its lowest level in 10 months or since October 2022.

For this week, Mr. Ricafort said the peso could trade sideways ahead of the rate-setting meetings by central banks.

The Fed raised interest rates by 25 basis points (bps) last month, bringing its benchmark overnight rate to a range between 5.25% and 5.5%.

It has hiked rates by a cumulative 525 bps since it began its tightening cycle in March last year.

The Federal Open Market Committee will next meet on Sept. 19-20 to review policy.

Meanwhile, the BSP extended its policy pause for a third straight time at its Aug. 17 meeting, keeping the benchmark interest rate at a near 16-year high of 6.25%.

The central bank has raised borrowing costs by 425 bps from May 2022 to March 2023 to tame inflation.

The Monetary Board will next meet on Sept. 21 to review policy.

The trader said the peso is likely to remain below the P57-per-dollar level due to a potential intervention from the BSP.

The trader sees the peso moving between P56.50 and P57 per dollar this week, while Mr. Ricafort sees it ranging from P56.50 to P56.95. — Aaron Michael C. Sy with Reuters

#Peso #trade #sideways #ahead #ratesetting #moves

Peso drops further following faster Aug. US consumer inflation

Peso drops further following faster Aug. US consumer inflation

THE PESO declined further against the dollar on Thursday as the US consumer price index (CPI) continued to pick up in August.

The local currency closed at P56.765 versus the dollar on Thursday, weakened by 4.50 centavos from Wednesday’s P56.72 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Thursday’s session stronger at P56.665 per dollar. Its intraday best was at P56.65, while its weakest showing was at P56.78 against the greenback.

Dollars traded went up to $1.17 billion on Thursday from the $1.02 billion on Wednesday.

The peso was dragged down by faster-than-expected August US consumer inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso weakened after US core inflation came in hotter than market expectations,” a trader likewise said.

US consumer prices increased by the most in 14 months in August as the cost of gasoline surged, but the annual rise in underlying inflation was the smallest in nearly two years, likely giving the US Federal Reserve cover to leave interest rates unchanged next Wednesday, Reuters reported.

The mixed report from the Labor Department on Wednesday was published a week before the Fed’s policy meeting and followed data this month showing an easing in labor market conditions in August. Economists, however, believe officials at the US central bank will continue to signal an additional rate hike this year given the stickiness in services inflation.

The US CPI went up by 0.6% in August after rising by 0.2% in the last two months.

In the 12 months through August, consumer prices picked up by 3.7% after rising by 3.2% in July.

For Friday, the trader said the peso could rebound ahead of a potentially softer US retail sales report.

The trader sees the peso ranging from P56.60 and P56.85 a dollar on Friday, while Mr. Ricafort expects it to move from P56.65 to P56.85. — AMCS with Reuters

#Peso #drops #faster #Aug #consumer #inflation

Peso weakens anew vs dollar ahead of US inflation report

THE PESO depreciated against the dollar anew on Wednesday on expectations of a pickup in US consumer inflation last month.

The local currency closed at P56.72 versus the dollar on Wednesday, weakening by seven centavos from Tuesday’s P56.65 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Wednesday’s session at P56.68 per dollar. Its intraday best was at P56.60, while its weakest showing was at P57.73 against the greenback.

Dollars traded went down to $1.02 billion on Wednesday from the $1.11 billion on Tuesday.

The peso was dragged down by expectations of faster US inflation in August, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso depreciated anew amid potentially higher US consumer inflation reports due to be released tonight,” a trader likewise said in an e-mail.

US consumer prices likely increased by the most in 14 months in August amid a surge in the cost of gasoline, but an expected moderate rise in underlying inflation could encourage the Federal Reserve to keep interest rates on hold next Wednesday, Reuters reported.

The consumer price index (CPI) likely increased by 0.6% last month, according to a Reuters survey of economists. That would be the largest gain since June 2022 and would follow two straight monthly advances of 0.2%.

Mr. Ricafort added that a stronger dollar and higher global crude oil prices on Wednesday caused the peso to decline.

The dollar index, which tracks the currency against six peers, held firm, though moves were subdued, up 0.1% to 104.70, as traders awaited the US CPI reading for August.

The dollar index has surged 5% since late July and stands at its highest level in around half a year.

Meanwhile, oil prices jumped about 2% to a near 10-month high on Tuesday on a tighter supply outlook and optimism over the resilience of energy demand in major economies.

Brent futures rose by $1.42 or 1.6% to settle at $92.06 a barrel, while US West Texas Intermediate crude rose by $1.55 or 1.8% to settle at $88.84. Both benchmarks closed at their highest levels since November 2022.

For Thursday, the trader said the peso could weaken further following the US CPI report and ahead of the release of US producer price index data.

The trader sees the peso moving between P56.60 and P56.85 a dollar on Thursday, while Mr. Ricafort expects it to range from P56.60 to P56.80. — AMCS with Reuters

#Peso #weakens #anew #dollar #ahead #inflation #report

Peso up on steady US inflation bets

Peso up on steady US inflation bets

THE PESO strengthened against the dollar on Tuesday after a survey by the New York US Federal Reserve showed Americans see stable inflation for the next five years.

The local currency closed at P56.65 versus the dollar on Tuesday, up by four centavos from Monday’s P56.69 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Tuesday’s session weaker at P56.72 per dollar. Its intraday best was at P56.63, while its worst showing was at P56.79 against the greenback.

Dollars traded went down to $1.11 billion on Tuesday from the $1.12 billion on Monday.

“The peso strengthened after the latest New York Fed survey signaled a stable US inflation outlook, dampening views of further US policy rate hikes,” a trader said in an e-mail.

Americans’ overall views on inflation were little changed in August, despite predictions of rising price increases for rent, homes and food, while downgrading their views of their personal financial situations, the New York Fed reported on Monday, Reuters reported.

The Consumer Sentiment Survey for August showed respondents see inflation a year from now at 3.6%, up from July’s 3.5%, while they project inflation three years from now to hit 2.8% versus 2.9% in July. Five years from now respondents see inflation at 3% from July’s 2.9%.

The Federal Open Market Committee will next meet on Sept. 19-20 to review policy.

The Fed hiked borrowing costs by 25 basis points (bps) last month, bringing its target rate to a range between 5.25% and 5.5%.

It has raised rates by a cumulative 525 bps since it began its tightening cycle in March last year.

The peso strengthened on Tuesday as the dollar traded weaker against the Japanese yen, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The dollar was last 0.89% weaker at 146.50 against the Japanese currency after earlier dropping about 1.3% to 145.89, its lowest since Sept. 1.

The dollar was on track for its biggest one-day percentage drop against the yen since July 12.

The dollar index, which measures the US currency against peers including the yen, was last down 0.32% to 104.52, after falling to 104.41, its lowest since Sept. 5. The dollar has climbed for eight straight weeks.

For Wednesday, the trader said the peso could trade sideways ahead of the release of August US consumer inflation data.

The trader sees the peso moving between P56.60 and P56.85 per dollar on Wednesday, while Mr. Ricafort expects it to range from P56.55 to P56.75. — AMCS with Reuters

#Peso #steady #inflation #bets

Peso inches lower vs dollar

THE PESO inched down against the dollar on Monday as investors were cautious ahead of the release of August US consumer price index (CPI) data this week.

The local currency closed at P56.69 versus the dollar on Monday, weakening by six centavos from Friday’s P56.63 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Monday’s session flat at P56.63 per dollar. Its intraday best was at P56.53, while its weakest showing was at P56.695 against the greenback.

Dollars traded went down to $1.19 billion on Monday from the $1.62 billion on Friday.

“The peso weakened amid market caution prior to the release of the US consumer inflation report for August 2023,” a trader said in an e-mail.

August US CPI data will be released on Wednesday.

The peso inched down due to signals from the Bangko Sentral ng Pilipinas (BSP) that inflation could return to its 2-4% target in the first quarter next year instead of this year, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

BSP Governor Eli M. Remolona, Jr. last week said he expects inflation to be back within its target range early next year amid lingering price risks.

He added that the BSP could upwardly revise its full-year inflation forecast of 5.6% for 2023 at their Sept. 21 policy meeting.

For Tuesday, the trader said the peso could depreciate further ahead of key US data releases.

The trader sees the peso moving between P56.60 and P56.85 per dollar on Tuesday, while Mr. Ricafort sees it ranging from P56.60 to P56.80. — AMCS

#Peso #inches #dollar

Peso may trade sideways

THE PESO could trade sideways against the dollar this week ahead of the release of US inflation data that could affect the US Federal Reserve’s next policy move.

The local unit closed at P56.63 versus the dollar on Friday, strengthening by 16 centavos from Thursday’s P56.79 finish, data from the Bankers Association of the Philippines’ website showed.

Week on week, however, the peso inched down by 3.50 centavos from its P56.595 close on Aug. 30.

The local unit opened Friday’s session at P56.74 per dollar. Its weakest showing was at P56.785, while its intraday best was at P56.56 against the greenback.

Dollars traded rose to $1.62 billion on Friday from $1.45 billion on Thursday.

The peso appreciated on Friday following the dollar’s slight decline in Asian trading, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For this week, the peso could move sideways against the dollar as the market awaits the release of August US consumer and producer inflation data, which could affect the Fed’s decision this month, Mr. Ricafort said.

The US central bank raised borrowing costs by 25 basis points (bps) last month, bringing its target rate to a range between 5.25% and 5.5%.

It has hiked rates by 525 bps since it began its tightening cycle in March last year.

The Federal Open Market Committee will hold its policy meeting on Sept. 19-20.

For this week, Mr. Ricafort expects the peso to range from P56.30 to P56.80 per dollar. — AMCS

#Peso #trade #sideways