THE PESO may move sideways against the dollar this week following stronger-than-expected US data and as the market awaits the release of key economic reports in the coming days.
The local unit closed the shortened trading week at P58.20 per dollar on Friday, weakening by 29 centavos from its P57.91 finish on Thursday, Bankers Association of the Philippines data showed. Philippine financial markets were closed for holidays on Dec. 30, Dec. 31, and Jan. 1.
Week on week, the peso slumped by 35.5 centavos from its P57.845-a-dollar finish on Dec. 27.
The peso dropped on Friday following strong US initial jobless claims data, a trader said in a phone interview.
The local unit weakened against a broadly stronger dollar on expectations that the US Federal Reserve will stay hawkish, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For this week, the main market drivers will be the latest US nonfarm payrolls data as well as the December and full-year 2024 Philippine inflation report, the trader said.
The trader sees the peso moving between P58 and P58.40 per dollar this week, while Mr. Ricafort expects it to range from P57.90 to P58.40.
The number of Americans filing new applications for unemployment benefits dropped to an eight-month low two weeks ago, pointing to low layoffs at the end of 2024 and consistent with a healthy labor market, Reuters reported.
The report from the Labor department on Thursday added to a recent raft of upbeat economic data, including consumer spending, in reinforcing the Federal Reserve’s projections for fewer interest rate cuts this year. Labor market resilience is keeping the economic expansion on track.
Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 211,000 for the week ended Dec. 28, the lowest level since April. Economists polled by Reuters had forecast 222,000 claims for the latest week. — AMCS with Reuters
