Peso inches up vs dollar

THE PESO appreciated slightly against the dollar on Thursday on the back of hawkish statements from a US Federal Reserve official.
The local unit closed Thursday’s session at P52.15 versus the greenback, 1.5 centavos stronger than the P52.165-per-dollar finish last Wednesday.
The peso opened the session weaker at P52.20, slipping to as low as P52.24 intraday. However, it bounced back to log its best showing at P52.12 before settling at its closing rate.
Trading volume thinned to $1.079 billion from the $1.31 billion that changed hands in the previous session.
A foreign exchange trader said the peso traded within a tight range after two days of big moves.
“The range was quite tight after two days of big moves. We just saw the dollar-peso consolidating. We’re seeing volatility, but at this point, it’s a wait and see what direction the peso will be,” the trader said yesterday in a phone interview.
Meanwhile, another trader said the peso strengthened after New York Fed President John Williams said persistently low US inflation has reduced broad expectations of future rate hikes from the central bank.
Mr. Williams said on Wednesday that the American economy is heading into a “new normal” of slower economic growth at about 2% this year from last year’s 3%.
However, Mr. Williams said slower growth “isn’t necessary cause for alarm,” given the “good” overall picture of the US economy.
“Fed Williams’ statement has reinforced views that the Fed might not adjust its policy rates this year if US inflation remains subdued well below the Fed’s 2% target,” the second trader said.
“This, in effect, will give room to the peso as well as other emerging market currencies.”
For today, the first trader expects the peso to move between P52 and P52.50, while the other gave a P52.05-P52.25 range. — KANV