Peso weakens on poor US jobs data

The peso weakened Thursday as investors gave up risky assets following poor jobs data in the US.

The local unit shed 13 centavos to end trading at 42.14:$1 from the 42.01:$1 close the previous trading day.

“Mostly, this is a reaction to the ADP numbers. Investors have risk-off sentiment today, and they shied away from emerging market currencies and turned to the safe-haven dollar,” a trader said.

Automatic Data Processing Inc. (ADP) reported that the US private sector only created 135,000 jobs in May, fewer than the forecast 157,000.

The weaker-than-expected jobs data cast doubts over the US and consequently the world's economic recovery, the first trader said.

A second trader also said there was a “natural bid for the dollar” after foreign investors exchanged the pesos they got from the domestic equities market to the dollar.

While the benchmark PSEi recovered on Thursday, the second trader noted that the local equities mart has a three-day clearing time before investors are given their pesos back.

“Thus, there is added demand for dollars today. And this stoked the dollar's price in peso terms,” he said.

Some $1.067 billion changed hands on Thursday, below the $1.252 billion a day previous.

Tracking jobless claims data, traders see the peso moving within the 42.00 to 42.35 per dollar band on Friday. — BM, GMA News