Peso rises ahead of US inflation data

BW FILE PHOTO

THE PESO strengthened against the dollar on Tuesday on market expectations of slower August US consumer inflation.

The local unit closed at P56.77 per dollar on Tuesday, gaining nine centavos from its P56.86 finish on Monday, based on data from the Bankers Association of the Philippines.

The peso opened Tuesday’s trading session at P56.80 per dollar. Its weakest showing was at P56.95, while its intraday best was at P56.73 versus the greenback.

Dollars exchanged rose to $934.45 million on Tuesday from $897.2 million on Monday.

“The peso appreciated amid market expectations of a potentially weaker US consumer inflation report for August,” a trader said.

August US consumer price index data were set to be released overnight.

“The peso was also stronger after the recent increase in local interest rates/bond yields that could increase the attractiveness of the peso,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

For Wednesday, the trader said the peso may strengthen further against the dollar on expectations of softer US producer inflation data.

The trader expects the local unit to move from P56.65 to P56.85 versus the dollar, while Mr. Ricafort gave a forecast range of P56.70 to P56.90. — D.G.C. Robles