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Peso retreats on strong US producer prices


The Philippine peso retreated on Friday as higher-than-expected data on the increase in US producer or wholesale prices provided further support on the Federal Reserve's stance on gradually tightening monetary policy.

The local currency shed 12 centavos to close at P50.650:$1 from 50.530 on Thursday.

"The peso depreciated today, as US producer prices increased larger than expected, supporting views of more rate hikes ahead," Land Bank of the Philippines market economist Guian Angelo Dumalagan said in an emailed commentary.

The dollar was supported by data showing producer prices unexpectedly rose in June.

The US Labor Department reported that its producer price index for final demand edged up 0.1 percent in June following unchanged data in May.

"The peso's drop was capped by increased caution in the market ahead of the US inflation report tonight," Dumalagan said.

Week-on-week, the peso declined by 7 centavos from P50.580:$1 on July 7. Year-to-date, it lost 93 centavos from 49.720 on December 29, the last trading day of 2016. — DVM, GMA News

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