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Peso rises as dollar consolidates

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THE PESO strengthened slightly against the dollar on Monday as the greenback weakened against other major and regional currencies.

The local currency moved sideways to end at P50.37 against the greenback yesterday, three centavos stronger than its P50.40-per-dollar close on Friday.

The peso opened Monday’s session at P50.32 against the dollar, while its intraday low stood at P50.41. Its best showing, meanwhile, was at P50.30 versus the greenback.

Trading volume climbed to $697 million yesterday from the $588.5 million that changed hands in the previous trading session.

“Dollar-peso is just consolidating. The dollar was trading significantly lower against the major currencies, so the dollar index was down,” a trader said in a phone interview yesterday.

The trader attributed the weakness of the dollar to the weaker-than-expected retail sales data released by the US Commerce department on Friday.

Despite recording a 0.4% increase in retail sales for the month of December, the data failed to reach the 0.5% expectation. The growth was due to strong consumer demand brought by the holiday season.

“Surprisingly, dollar-Asia moved [higher], but not significantly compared with the other major currencies,” the trader added.

Another trader said the peso appreciated yesterday “amid mixed US inflation readings.”

As US headline inflation showed a slower reading in December, core inflation, as measured by the consumer price index, rose 0.3% compared with the figure a month ago, topping analysts’ expectations.

For Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, market players are looking forward to the release of the Philippine economic growth data later this month.

“[Market players are] looking forward to the GDP (gross domestic product) numbers, which are [generally seen as] positive. Basically, the peso appreciated due to it,” Mr. Asuncion said.

He said expectations of upbeat GDP growth data are driven by “increased investments, particularly in the infrastructure, and consumer spending.”

For today, Mr. Asuncion said the local currency may move between P50.30 and P50.50, while the two traders gave a slightly wider ranges of P50.20 to P50.50.

“The peso is seen to appreciate [today] due to likely stronger balance of trade data from the Euro area which can weaken the dollar,” the second trader noted. — Karl Angelo N. Vidal