The PESO could strengthen against the greenback this week amid expectations of bullish data on remittances and as the market waits for more signals from the US Federal Reserve on the timing of its decline.
Local unit closed P50.58 on the dollar on Friday, depreciating two centavos from P50.56 Finish on Thursday, data from the Philippine Bankers Association showed.
Still, the peso has strengthened by 21 centavos from its close of P50.79 on October 1.
The peso depreciated on Friday amid demand for a safe haven for the dollar amid rising oil prices, Rizal Commercial Banking Corp’s chief economist said. Michael L. Ricafort.
Reuters reported that fuel prices rose nearly 5% last week after some industries began switching from oil to gas amid uncertainty over whether the US government would release oil from its strategic reserves. .
Brent crude futures jumped $ 1.07 or 1.3% to $ 83.02 a barrel at 6:43 a.m. GMT on Friday, while US West Texas Intermediate crude futures rose 1.07. $ 11 or 1.4% at $ 79.41 per barrel.
Meanwhile, UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion said market sentiment improved last week after the release of data showing a slowdown inflation in September.
The consumer price index rose 4.8% in September, declining from 4.9% recorded in August but faster than the 2.3% recorded in the same month last year, reported the the Philippines Statistics Authority last week.
Title inflAverage rate of 4.5% for the nine months to September, still above the Bangko Sentral ng Pilipinas (BSP) target of 2-4% and 4.4% forecast for this year.
For this week, Mr Ricafort said the data on remittances will affect market sentiment. August disbursement data will be released by the central bank on Friday, October 15.
Remittances rose 2.5% year-on-year in July to $ 2.853 billion. This is the highest monthly entry since the $ 2.89 billion recorded in December 2020.
This brought inputs for the Fithe first seven months to $ 17.771 billion, up 5.8% from the same period in 2020. The BSP expects remittances to increase 6% this year.
Meanwhile, Asuncion said investors will also be looking for leads from the Federal Open Market Committee (FOMC) ‘s previous policy review minutes, which will be released on Thursday.
Last month, the Fed kept its policy settings unchanged, although officials have signaled they could start cutting asset purchases as early as November.
For this week, Mr. Ricafort expects the local unit to move between 50.30 and 50.80 pesos per dollar, while Mr. Asuncion gave a forecast range of 50.40 pesos to 50.90 pesos. pesos. – Luz Wendy T. Noble with Reuters