‘Softer-than-expected inflation’ buoys Philippine peso

The Philippine peso appreciated against the US dollar for the second consecutive trading day on Monday, fueled by what the market considered as slower-than-expected inflation figures.

The local currency gained 4.5 centavos to close at P54.185:$1 on Monday, versus P54.23:$1 on Friday.

“The peso appreciated following the softer-than-expected September inflation reading last week, despite being weaker in the intraday trade, amid mostly upbeat US labor data last Friday,” Guian Angelo Dumalagan, market economist at Land Bank of the Philippines, said in an email interview.

Inflation clocked in at 6.7 percent in September, the fastest in over nine years since it registered at 7.2 percent in February 2009.

It was slower than the Bangko Sentral ng Pilipinas’ (BSP) forecast of 6.8 percent within  the range of 6.3 to 7.1 percent.

Dumalagan said the market will be closely monitoring the release of US inflation data later this week.

“The dollar is expected to move sideways, with an upward bias, this week, supported by likely upbeat US producer and consumer price inflation reports as well as possibly hawkish remarks from various US Federal Reserve officials,” he said. —VDS, GMA News