THE PESO slightly improved against the dollar on Wednesday as the market anticipates the release of the December US consumer price index (CPI) figures, which could influence the US Federal Reserve’s easing policy cycle.
The local currency concluded at P58.575 per dollar on Wednesday, gaining 4.5 centavos from its P58.62 close on Tuesday, according to data from the Bankers Association of the Philippines.
The peso commenced Wednesday’s trading session slightly lower at P58.65 against the dollar. Its intraday peak was its closing figure of P58.575, while its lowest point reached P58.70 against the greenback.
Dollar transactions diminished to $1.37 billion on Wednesday from $1.42 billion on Tuesday.
The peso predominantly moved sideways against the dollar on Wednesday as market participants exercised caution ahead of the release of the December US CPI figures overnight, a trader communicated via phone.
The dollar also weakened following a report that indicated the planned tariffs by US President-elect Donald J. Trump’s administration might be implemented gradually, stated Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message.
For Thursday, the trader predicts the peso to fluctuate between P58.50 and P58.80 per dollar, while Mr. Ricafort anticipates it to range from P58.45 to P58.65.
The dollar’s impressive rally encountered a setback on Wednesday as traders became cautious ahead of a highly anticipated US consumer inflation report expected later in the day, as reported by Reuters.
The key market event on Wednesday will be the US inflation readings, with investors projecting a 0.2% rise in core consumer prices month-on-month for December. Any unexpected increase could further constrain the Federal Reserve’s capacity for rate cuts this year.
The greenback steadied during the Asian session after a decline overnight, moving away from a more than two-year high reached at the start of the week. The dollar index was last reported at 0.03% lower at 109.17.
The dollar’s drop on Tuesday was partially attributed to a subdued report on US producer prices, which brought Treasury yields down from their peaks. — A.M.C. Sy with Reuters