THE PESO is expected to strengthen further against the dollar this week ahead of the release of June Philippine inflation data and minutes of the US Federal Reserve’s meeting last month.
The local currency closed at P55.20 versus the dollar on Friday, strengthening by 10 centavos from Thursday’s P55.30 finish, data from the Bankers Association of the Philippines’ website showed.
This was the peso’s strongest close since its P54.93-per-dollar finish on April 11.
Week on week, the peso also appreciated by 57 centavos from its P55.77 finish on June 23.
The local unit opened Friday’s session weaker at P55.45 per dollar. Its weakest showing was at P55.52, while its intraday best was at P55.17 against the greenback.
Dollars traded jumped to $1.051 billion on Friday from the $905.1 million recorded on Thursday.
The peso strengthened on Friday after the Bangko Sentral ng Pilipinas (BSP) said inflation may have slowed further in June, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The BSP last week said headline inflation likely settled within 5.3% to 6.1% in June, with upward pressures coming from higher electricity rates and increases in costs of oil and some food items, which could have been offset by lower prices of meat, fruits and liquefied petroleum gas.
A BusinessWorld poll of 17 analysts yielded a median estimate of 5.5% for June inflation, near the lower end of the central bank’s forecast range.
If realized, this would be slower than the 6.1% in May and will be the fifth consecutive month of easing inflation. Still, June would mark the 15th straight month that inflation surpassed the BSP’s 2-4% target for the year.
The Philippine Statistics Authority will release June consumer price index data on July 5.
For this week, Mr. Ricafort said the peso could continue to appreciate against the greenback ahead of the release of June inflation data.
The peso could also be supported by the release of the minutes of the Fed’s June 13-14 meeting on Tuesday, Mr. Ricafort added.
The Fed last month paused its tightening campaign after hiking policy rates for 10 straight meetings by a cumulative 500 basis points to a 5-5.25% range.
The US central bank will next meet to review policy on July 25-26.
Mr. Ricafort expects the peso to trade between P55 and P55.50 per dollar this week. — AMCS
