Peso rises after gov’t RDB sale, US CPI report

THE PESO strengthened versus the greenback on Wednesday after the government’s maiden sale of retail dollar bonds and softer US inflation in August.

The local unit closed at P49.79 per dollar on Wednesday, appreciating by 12 centavos from its P49.91 finish on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened Wednesday’s session at P49.92 per dollar. Its weakest showing was at P49.935, while its intraday best was at P49.75 versus the greenback.

Dollars exchanged dropped to $654.8 million on Wednesday from $678.45 million on Tuesday.

The peso rose after the Bureau of the Treasury’s maiden offer of onshore retail dollar bonds (RDBs).

The government raised an initial $866.2 million from the papers on Wednesday. Broken down, the Treasury borrowed $551.8 million from the five-year notes and $314.4 million via the 10-year RDBs during the price-setting auction on Wednesday.

The offer was upsized from the initial plan to raise just $200 million from each tenor after demand for the papers hit $938.2 million.

Meanwhile, the trader said data showing slower US inflation in August also boosted the peso.

The US Labor Department on Tuesday said the overall consumer price index (CPI) rose 0.3% in August, slowing from the 0.5% in July, Reuters reported. This is also softer than the 0.4% estimate by economists in a Reuters poll.

Core inflation, which excludes volatile food and energy components, rose by 0.1%, marking the slowest increase since February and also easing from the 0.3% in July. It was likewise softer than the 0.3% estimated by economists in a Reuters poll.

For Thursday, Mr. Ricafort gave a forecast range of P49.70 to P49.90 per dollar, while the trader expects the local unit to move within P49.65 to P49.90. — LWTN with Reuters

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