THE PESO could bounce back against the dollar at the start of the week after the latest US non-farm payrolls (NFP) report missed expectations, although “cautious” trading is still expected as market players anticipate the release of the minutes of the Federal Reserve’s latest meeting.
The peso ended flat against the dollar on Friday to close at P46.77 versus the greenback, almost unchanged from its previous day’s finish of P46.76 per dollar.
Week on week, the peso was up by nine centavos compared to its P46.86 close last Sept. 24.
Traders interviewed by phone last week said the US jobs data will direct the movement of the dollar-peso trading.
“Trading will be dependent on the NFP figures that will come out.
Should it beat expectations, then we’ll see the dollar surge further [this] week and peso to test new lows … otherwise, we might see the peso recover its previous losses,” one trader said ahead of the data release on Friday.
“We expect continued cautious and sentiment-driven trading, particularly depending on leads overseas,” the trader added.
Another trader said the jobs data is important as it provides guidance for the Fed on the state of its labor sector, a key consideration for its rate hike decision.
“Trading will be sentiment driven, so strong NFP will boost the dollar, while disappointing data will drag it at least at the start of the week… we expect continued volatility towards the end of the week as market players will keep its eyes on US economic data releases — the weekly jobless claims report, ISM non-manufacturing index, and the release of the FOMC (Federal Open Market Committee) minutes.”
The US Labor Department reported on Friday that non-farm payrolls added last September totaled 142,000, widely missing expectations.
One trader said the peso could move within the P46.40 to P46.70-per-dollar band, while another said it could be in the P46.60-P46.90 range.
But despite financial market volatilities on worries over the slowing Chinese economy and the anticipated US rate hike this year, the peso is expected to remain among the most resilient currencies in Asia, according to Standard Chartered economist Jeffrey Ng.
“Our bullishness for the peso to rebound is mainly led by our hope of a very dovish US Fed rate hike… The Philippine peso has been one of the stronger currencies so far,” Mr. Ng said last week. — Imee Charlee C. Delavin
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