THE PESO strengthened against the dollar on Tuesday as the market expects slower June inflation.
The local currency closed at P55.23 versus the dollar on Tuesday, up by nine centavos from Monday’s P55.32 finish, data from the Bankers Association of the Philippines’ website showed.
The local unit opened Tuesday’s session stronger at P55.20 per dollar, which was also its intraday best. Its weakest showing was at P55.30 against the greenback.
Dollars traded dropped to $801.82 million on Tuesday from the $1.26 billion seen on Monday.
The peso climbed against the greenback ahead of the release of June inflation data “that is expected to ease further for the coming months due to higher base effects,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The peso appreciated from local optimism ahead of a likely weaker Philippine inflation report [on Wednesday],” a trader likewise said in an e-mail.
The Philippine Statistics Authority will release June inflation data on Wednesday.
A BusinessWorld poll of 17 analysts held last week yielded a median estimate of 5.5% for June inflation, within the 5.3% to 6.1% forecast given by the Bangko Sentral ng Pilipinas (BSP) for the month.
If realized, this will be slower than the 6.1% print in May 2023 and June 2022. It would also be the slowest since the 5.4% in May 2022.
June would mark the fifth consecutive month of slower inflation, and the 15th straight month that inflation surpassed the BSP’s 2-4% target range.
The peso rose amid a softer dollar recently, Mr. Ricafort added.
The dollar fell slightly against the yen on Tuesday as markets remained on high alert for signs of Japanese intervention, Reuters reported.
The greenback was down 0.19% by 0833 GMT to 144.45 yen, after rising 0.27% on Monday.
The US dollar index, which tracks the greenback against six major peers, was also little changed at 103.
For Wednesday, the trader said the peso will likely continue to rise against the dollar on positive inflation data.
The trader expects the peso to range from P55.20 to P55.40 per dollar on Wednesday, while Mr. Ricafort sees it moving from P55.15 to P55.35. — AMCS with Reuters