Peso depreciates before key US inflation report

THE PESO dropped against the dollar on Thursday as the market awaited the release of August US consumer price index (CPI) data overnight that could cement a US Federal Reserve rate cut at its meeting next week.

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The local unit closed at P57.191 versus the greenback, weakening by 6.6 centavos from its P57.125 finish on Wednesday, Bankers Association of the Philippines data showed.

The peso opened Thursday’s session stronger at P57.05 versus the dollar, Its intraday high was at P57.04, while its worst showing was at P57.28 against the greenback.

Dollars traded went up to $1.57 billion on Thursday from $1.44 billion on Wednesday.

“The dollar-peso consolidated today as the market awaited US inflation data to be released tonight,” a trader said in a phone interview.

The dollar was mostly stronger on Thursday on safe-haven demand due to renewed geopolitical tensions, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said ina Viber message.

For Friday, the trader expects the peso to move between P57 and P57.40 per dollar, while Mr. Ricafort sees it ranging from P57.05 to P57.30.

The dollar held steady on Thursday as traders await key US consumer price data for a steer on the Federal Reserve’s rate cutting path, while the euro was unchanged ahead of a European Central Bank (ECB) meeting, Reuters reported.

“The main event is the US CPI... The market is looking for reasons to reprice the Fed lower and push the USD down,” said Michalis Rousakis, G10 FX strategist at Bank of America.