Philippine Peso Dips Slightly as Markets Anticipate US Economic Data

On Thursday, the Philippine peso experienced a marginal decline against the US dollar in anticipation of forthcoming key US economic data releases. The peso settled at P55.40 per dollar at the close of the day, marginally weaker by a fraction of a centavo compared to its previous day's closing at P55.396, according to the Bankers Association of the Philippines.

Peso Performance Throughout the Day

In the early trading hours, the peso showed a slight uptick, starting the day stronger at P55.37 against the dollar. During the session, the peso fluctuated and touched an intraday low of P55.44 and a high of P55.36.

The volume of dollars traded on the market decreased to $868.8 million from $1.01 billion the day before, indicating a drop in currency exchange activity.

Economic Factors Influencing the Peso

Observers noted that the peso's weakening came ahead of expected data on US producer prices and retail sales, which could impact investor sentiment. Additionally, increasing global crude oil prices contributed to the currency's movement. Michael L. Ricafort, Chief Economist at Rizal Commercial Banking Corp., provided this analysis via a Viber message.

A trader also noted the peso's slight dip ahead of what was believed to be a strong US retail sales report set to be released overnight.

Meanwhile, the US dollar showed some strength ahead of the economic data release, with investors closely watching for indications that could affect US interest rate decisions. The dollar index, a measure against a basket of six major currencies, went up by 0.14% to 102.89.

Despite recent hot US consumer inflation data, the dollar has shown resilience. This year, it has gained approximately 1.5% amidst signs that the US economy remains robust, leading investors to scale back their expectations for aggressive interest rate cuts.

Upcoming Economic Data and Market Outlook

Market watchers are eyeing data on US producer inflation, retail trade, and weekly jobless claims for further insights into the state of the economy and the potential for rate adjustments.

In the commodities market, Brent crude oil experienced a modest increase, while US crude prices remained steady. The minor shifts in oil prices could also exert influence on currency valuations.

For the following day, some traders have predicted the peso could face further weakness amid expectations of a rate cut by the Chinese central bank, which could have spillover effects on regional currencies.

Experts forecast the peso to trade within a range of P55.30 to P55.55 against the dollar, although these projections can quickly change based on the outcome of the awaited economic reports.

Peso, Dollar, Economy