Peso flat amid dollar weakness; awaiting US GDP data

THE PESO ended the week little changed in quiet trading and as global markets await the release of key US economic data, traders said.

The peso ended at P50.57 on Friday, against its Thursday close of P50.56.

The currency was rangebound for much of the day after opening at P50.60, falling to a low of P50.63, while peaking at P50.54.

Dollar volume was $432 million, down from $560.5 million on Thursday.

Traders said the peso traded sideways as investors await the announcement of US gross domestic product (GDP) growth due Friday night US time.

“Nothing much happened, it was just flat although we have been seeing the dollar trade lower against major currencies; the dollar was trading at multi-year lows,” one trader said by phone on Friday.

Another trader said: “There was caution ahead of the US GDP growth report and as investors continued to digest the balanced to dovish tone of the Federal Reserve this week.”

Reuters reported that the Fed kept interest rates unchanged on Wednesday and signalled it will wind down its bond operations “relatively soon,” which was taken to mean enhanced confidence in the US economy.

The Fed maintained its target range of 1% to 1.25% for the benchmark lending rate as expected, and said it was on track to continue with a on a gradual path of monetary tightening, which has lifted rates by a percentage point since 2015.

Bangko Sentral Deputy Governor Diwa C. Guinigundo said the Fed’s move will provide Philippine monetary authorities “some flexibility.”

“That would also give us some flexibility in our view on the exchange rate. There is a good possibility of some reversal in market sentiment given this monetary decision of the US Fed as our macroeconomic fundamentals remain robust,” he said in a text message on Thursday night. — Janine Marie D. Soliman