Connect with us

Hi, what are you looking for?

Economy

Peso may falter as market sees faster inflation

THE PESO will likely retreat this week due to safe-haven demand for the greenback caused by expectations of quicker January inflation.

The local unit closed at P48.08 per dollar on Friday, appreciating by three centavos from its P48.11 finish on Thursday, data from the Bankers Association of the Philippines showed.

However, it was nearly unchanged from its P48.085-per-dollar close a week earlier.

The peso climbed on Friday following the rebound of US stocks overnight.

This soothed market fears from previous days caused by hedge funds selling long positions to cover shorts in relation to the “Reddit rally” that fueled shares of GameStop and other volatile stocks.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the peso saw some weakness last week on market cautiousness amid a possible delay in a proposed US stimulus.

This week, the market will mainly move in anticipation of January inflation data due on Friday, Security Bank’s Mr. Ricafort said.

A BusinessWorld poll of 16 economists last week yielded a median estimate of 3.6% for January headline inflation, with economists citing higher food and oil prices. The median is closer to the higher end of the 3.3% to 4.1% estimate given by the Bangko Sentral ng Pilipinas (BSP) for the month as well as its 2-4% target for the year.

If realized, January would mark the fourth consecutive month of quicker inflation as this will be faster than both December’s 3.5% and the 2.9% print in January 2020.

UnionBank’s Mr. Asuncion said safe-haven demand for the dollar may cause the peso to depreciate this week, as dovish signals from the US Federal Reserve last week were not enough to calm the market amid lingering economic concerns.

The Fed last week maintained its key policy rate near zero and assured it will keep providing support until a rebound from the recession becomes more solid.

Mr. Ricafort expects the peso to move within P48.03 to P48.13 versus the dollar this week, while Mr. Asuncion sees a wider trading band of P48.05 to P48.25. — L.W.T. Noble with Reuters

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

A Cotswold-based authentic Italian food business set up by a couple who initially dreamed of sharing the classic flavours of Italy with the local...

Economy

Filinvest Land, Inc. (FLI), one of the country’s largest real estate developers, reported P4.31 billion in revenues and other income for the first quarter...

Investing

Tesco is to hand pig farmers £6.6m in additional support, taking the total to £10m, after warnings that a slew of producers could go...

Investing

Elon Musk has suggested that he could seek to pay a lower price for Twitter, as the social media company’s would-be owner expressed further...

Investing

Tens of thousands of apprenticeships could be created and hundreds of millions of pounds saved if the flawed apprenticeships levy were reformed, according to...

Economy

The man accused of killing a doctor and wounding five other people in a shooting at a Taiwanese-American church banquet in California methodically planned the attack because he was upset over Chinese-Taiwanese tensions,...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.