THE PESO inched up on Tuesday as the dollar was generally weaker ahead of the release of key US data later this week.
The local unit closed at P58.77 per dollar on Tuesday, strengthening by three centavos from its P58.80 finish on Monday, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s session stronger at P58.73. It traded better than its Monday close the entire session as its weakest showing was at just P58.777, while its intraday best was at P58.70 versus the greenback.
Dollars exchanged rose to $814.1 million on Tuesday from $559.25 million on Monday.
The dollar weakened on Tuesday ahead of the release of US gross domestic product (GDP) growth data for the first quarter and the personal consumption expenditures (PCE) data for May, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The peso appreciated amid expectations of a decrease in the US PCE inflation report this week,” a trader likewise said in an e-mail.
In the broader market, the dollar eased slightly ahead of Friday’s release of the US PCE price index — the US Federal Reserve’s preferred measure of inflation, Reuters reported.
PCE inflation is expected to have ticked down to 2.6% year on year in May from 2.7% in April.
The dollar index, which measures the currency against six major peers, was last flat at 105.47, down slightly from a two-month high on Friday.
Meanwhile, the dollar attempted to break above the key 160 yen level on Tuesday but with little success as fears of intervention from Japanese officials deterred traders from punishing the yen too severely against other currencies, Reuters reported.
The dollar was last 0.1% lower at 159.49 yen, clinging to a tight range, as traders remained wary of testing the key resistance level that had prompted a 9.79 trillion yen ($61.33 billion) currency intervention from Tokyo in late April and early May.
The latest decline in the yen has come on the back of the Bank of Japan’s (BoJ) June policy meeting, where policy makers disappointed investors who were betting on an immediate reduction of the BoJ’s massive bond purchases.
For Wednesday, the trader said the peso may continue to strengthen ahead of the Bangko Sentral ng Pilipinas’ policy meeting on Thursday.
The trader expects the peso to move between P58.60 and P58.85 per dollar on Wednesday, while Mr. Ricafort sees the peso ranging from P58.65 to P58.80. — AMCS with Reuters
