The local unit opened at P49.725 versus the greenback, slightly stronger than its previous close and also its intraday high. It succumbed to the dollar’s strength later in the session, though, with its trough for the day seen at P49.85.
Two traders interviewed yesterday said the session was relatively muted, with market players focused on the release of key economic data in the US in the coming days.
“Trading has been very quiet; the recent range is still holding for now. The market is still looking forward to employment reports [from the US],” one trader said in a phone interview.
The US will release non-farm payrolls (NFP) data on Friday. Market players are expecting that some 185,000 jobs were created in May coming from 211,000 new positions in April, while unemployment is seen to hold at the 4.4% level.
Meanwhile, the privately-commissioned ADP National Employment Report will be released a day before the official data.
Strong labor figures would help shape the Federal Reserve’s decision on the timing of an interest rate hike, while a disappointing turnout may defer plans for a fresh lift-off. Some analysts are doubting chances of a rate hike during the Fed’s upcoming June 13-14 review.
A second trader added that the peso likely moved alongside Asian currencies as the dollar strengthened yesterday, with the local unit simply consolidating.
Both traders also said that President Rodrigo R. Duterte’s certification of the tax reform bill as urgent did not affect the day’s trading, as the passage of the proposal within the year has been already “priced in” by investors.
To recall, the peso strengthened versus the dollar last May 4, which traders attributed to the passage of the tax measure at the committee level of the House of Representatives.
For today, the peso is still likely to trade range-bound, with the first trader pointing out that the dollar is unlikely to budge with the US observing a holiday in time for Memorial Day.
The first trader expects the peso to trade within P49.70 to P50 on Tuesday, while the second expects a P49.75-P49.95 range.
The dollar index was up about 0.03% against a basket of currencies, extending Friday’s rally when it hit a one-week high on positively revised US gross domestic product data.
Earlier in the session, North Korea fired about one short-range ballistic missile that landed in the sea off its east coast, the latest following two successful tests of medium-to long range missiles in defiance of world pressure and threats of more sanctions.
Investors are also awaiting China’s official factory activity data, due on Wednesday, which is expected to show the slowest pace of growth in eight months, according to a poll by Reuters. Analysts expect China’s overall economic growth to slow gradually over the rest of the year. — with Reuters
