Peso up 10 centavos, returns to P53:$1 level
THE peso returned to the P53:$1 level on Friday, recovering slightly against the greenback on the back of weaker-than-expected United States inflation.
The currency opened at P54.02:$1 and rose to as high P53.96 during the day. It closed at P53.97 per dollar, up 10 centavos from Thursday.
“The peso appreciated today (Friday) due to weaker-than-expected August 2018 US inflation, which came in at 2.7 percent from 2.9 percent in the prior month and below consensus of 2.8 percent,” Land Bank of the Philippine market economist Guian Angelo Dumalagan said.
The currency fell to a near 13-year low of P54.13 against the dollar on Wednesday, losing 19 centavos on news of a wider trade deficit, strong US jobs growth and a likely escalation of the US-China trade war.
The government has acknowledged the peso’s decline, but said this was in line with regional currency movements. The peso’s 7.39-percent drop since the start of the year, the Finance department said, is not as steep as the 11.7 percent for the Indian rupee and 9 percent for Indonesia’s rupiah.
The department also claimed that the countries experiencing currency declines were among the fastest-growing: India (8.2 percent in the first half), China (6.8 percent), the Philippines (6.3 percent) and Indonesia (5.1 percent).
On Monday, Japan’s Nomura said a foreign exchange crisis was unlikely in the near term for the Philippines, with the country getting the best score in an “early warning system” focused on emerging market economies.
Economic managers earlier this year raised their peso-dollar exchange rate assumptions to P50-53:$1 for 2018-2022 from P49-52 previously.
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