THE PESO went up against the dollar on Monday as traders stayed cautious before the release of key US inflation data this week.
The currency inched up by 4.1 centavos to end at P62.76 versus the greenback from its P62.801 finish on Friday, Bankers Association of the Philippines data showed.
The local unit opened Monday’s session stronger at P62.65 per dollar, which was also its intraday high. Its weakest showing was P62.80.
Dollars traded went down to $1.056 billion from $1.393 billion.
The peso traded within a narrow range ahead of the release of US consumer and producer inflation data later this week as these could affect the Federal Reserve’s policy decision this month, the first trader said by phone
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added that there were signs of possible intervention in the market to smoothen volatility.
“The peso appreciated on growing expectations that the BSP (Bangko Sentral ng Pilipinas) might deliver a policy rate hike next week,” a second trader said in an e-mail.
The BSP’s Monetary Board will meet to review its policy stance on Oct. 22. The market widely expects a fourth straight hike after September inflation sharply picked up to an over three-year high of 7.2% from 6.1% in August and 1.7% a year ago. This marked the seventh straight month that inflation remained above the central bank’s 3% target.
For Tuesday, the first trader sees the peso ranging from P62.60 to P62.90 against the dollar, while both Mr. Ricafort and the second trader expect the currency to move between P62.60 and P62.85. — Aaron Michael C. Sy