P51.7/$ seen for the week

The peso exchange could range from P51.7 to P52.20 in the coming week

Coming from a stronger valuation during Friday’s trading, the local unit, the peso, is seen appreciating to as high as P51.7 against the US dollar, various private sector economists said over the weekend.

Carlo Asuncion, chief economist at Union Bank of the Philippines, said such factors as the lower-than-anticipated inflation print in August as well as the possible easing by the US Fed contributed to his outlook.

“From Friday’s slight strength of the peso, it may have possibly been contributed by the lower-than-expected August 2019 inflation. General market perception may have also been a factor due to positive US economic data recently released,” Asuncion said in a text message.

According to him, the peso will trade within the P51.7 to P52 per dollar range given positive signs coming from the US economic data releases.

Rizal Commercial Banking Corp. lead economist Michael Ricafort projected a slightly lower exchange rate although he said the local unit could end trading stronger at P51.7 per dollar.

“The peso exchange could range from P51.7 to P52.20 in the coming week. Weaker-than-expected US jobs data and possible 0.25-Fed rate cut at the next rate-setting meeting on 18 September 2019 could weigh on the US dollar versus global/Asian currencies,” Ricafort said.

“(The) peso (is) also stronger recently after higher GIR (gross international reserves) data at a 3-year high of $85.6 billion and also near the record high of $86.1 billion posted in September 2016,” he added.

Also, Ricafort said the strengthening trend will likely continue given upbeat market sentiment on the resumption of trade talks between the US and China.

“(The) peso could continue to be stronger versus the US dollar amid positive sentiment on the global financial markets after the US and China agreed to resume talks in early October 2019 and plans by China’s government for stimulus measures such as the reduction of banks’ reserve requirements and lower risk of no-deal Brexit recently,” Ricafort said.

The peso closed P51.9 per dollar on Friday, 10.5 centavos stronger than its previous close of P52.01.