THE PESO moved sideways versus the dollar yesterday, with market players taking a wait-and-see stance ahead of the release of official jobs data in the United States later this week.

The local unit closed at P51.01 against the greenback, dropping one centavo from Wednesday’s P51 finish. The peso opened weaker at P51.07-per-dollar and hit a trough of P51.08 during the session. It touched the P50.96-per-dollar level as its best showing for the day before returning below P51 as trading closed.

Traders interviewed yesterday said the peso simply traded within its usual range as it reacted to economic data from the US, alongside a faster-than-expected inflation print at home.

“The ADP came out as expected and if you look at it, the reports were okay… I think that’s one of reasons why the dollar had support and rates are holding up in the US,” one trader said in a phone interview.

Reuters reported that American private firms added 135,000 jobs in September, higher than expectations from economists at 125,000 new positions. This came despite the expected downward impact drawn from hurricane Harvey and Irma which are said to affect small retailers.

The privately commissioned ADP report comes ahead of the release of official non-farm payrolls (NFP) data due on Friday night, which is one of the deciding factors factored in by the Federal Reserve in assessing the recovery of the US economy.

Strong labor figures would strengthen the decision of the Fed to raise interest rates for a third time this year, while a disappointing turnout may halt such plans.

The trader also pointed out that there could have been an initial reaction to the 3.4% inflation reading posted in September, with some banks calling for a rate hike from the Bangko Sentral ng Pilipinas as price increases continue to pick up.

“Everyone’s waiting for the NFP on Friday night,” a second trader added, pointing out that the range-bound trading observed for the peso reflected market anticipation.

Dollars traded yesterday totalled $794.7 million, rising from the $761.75 million that exchanged hands on Wednesday.

Both traders attributed the higher volume to a foreign bank “aggressively” selling the currency which in turn drove the peso-dollar exchange rate’s initial recovery.

For today, the first trader expects the peso to log within the P50.90-P51.25 range, with the currency likely to simply consolidate as the week ends.

Meanwhile, the second trader sees the peso moving between P50.90-P51.10.

Most Asian currencies took a knock on Thursday as the dollar firmed on US economic data that showed strong growth in the country’s service sector.

US service sector growth rate hit its fastest in 12 years in September, helping the dollar index against a group of six rivals rise marginally.

The Indian rupee also weakened slightly after the Reserve Bank of India kept its policy rate unchanged, which was within sight of seven-year lows, due to the surge in inflation.

In other Asian currencies, the Singapore dollar was among the biggest decliners, falling 0.2% against the dollar.

The Thai baht and the Indonesian rupiah also inched lower.

Meanwhile, the Taiwan dollar crawled up, headed for its best day in about four weeks. China, Hong Kong and South Korea markets are closed for a holiday. — Melissa Luz T. Lopez with Reuters

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