Peso may be range-bound as market eyes Fed, BSP reviews

THE PESO is expected to move sideways against the dollar this week ahead of expected rate cuts by both the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

- Aaron Michael C. Sy with Reuters

On Friday, the local unit closed at P58.935 per dollar, rising by 8.7 centavos from its P59.022 finish on Thursday, data from the Bankers Association of the Philippines showed.

Week on week, however, the peso fell by 29 centavos from its P58.645 close on Nov. 28.

“The dollar-peso initially rallied following release of lower-than-expected inflation rate, supporting bets of a BSP rate cut next week. But profit taking pulled the pair ahead of US data tonight,” a trader said in a phone interview on Friday.

Headline inflation slowed to 1.5% in November from 1.7% the month prior and 2.5% in the same month in 2024, the Philippine Statistics Authority reported on Friday.

This was a tad below the 1.6% median estimate in a Business-World poll of analysts and was within the BSP’s 1.1-1.9% forecast for the month.

The November print brought the 11-month average to 1.6%, lower than the central bank’s 1.7% full-year forecast and 2-4% annual target.