Peso weakens against dollar ahead of Q2 GDP, US labor data
Key Takeaways
- •The peso closed at P60.815 per dollar on Thursday, down 6.4 centavos from Wednesday's finish of P60.751.
- •Total dollar turnover declined to $2.04 billion from $2.17 billion in the previous session.
- •A BusinessWorld poll of 21 economists yielded a median Q2 GDP growth estimate of 2.8%, matching the first-quarter pace but well below the 5.4% growth recorded in the same period last year.
- •The projected Q2 growth rate would fall short of the government's full-year target range of 3.5% to 4.5%.
- •Analysts forecast the peso to trade between P60.50 and P60.90 against the dollar on Friday.
THE PESO weakened anew against the dollar on Thursday as sentiment turned cautious ahead of the release of second-quarter Philippine gross domestic product (GDP) data and US labor figures.
The currency fell by 6.4 centavos to close at P60.815 against the greenback from Wednesday’s P60.751 finish, according to data from the Bankers Association of the Philippines’ website.
The local unit opened Thursday’s session stronger at P60.68. It reached an intraday high of P60.58, before weakening to a low of P60.835 against the dollar.
Dollar turnover declined to $2.04 billion from $2.17 billion.
“The peso initially went to lows of P60.58, tracking dollar weakness following weak ADP National Employment Report numbers, but strong buying pressure ahead of NFP (nonfarm payrolls) data tonight pushed the pair to a high P60.835 before closing at P60.815,” a trader said by phone.
US nonfarm payrolls data is closely watched globally as a key input for Federal Reserve rate decisions, which influence capital flows into emerging-market currencies such as the peso.
Expectations of weaker Philippine GDP growth for the second quarter also weighed on the peso, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. The Philippine Statistics Authority will release the GDP report on Friday (Aug. 7).
A BusinessWorld poll of 21 economists put the median GDP growth estimate at 2.8% for the April-to-June period. That would match the first-quarter pace but be much slower than the 5.4% expansion in the same period last year.
The estimate would also fall below the government’s 3.5%-4.5% full-year target.
For Friday, the trader expects the peso to move between P60.50 and P60.90 per dollar, while Mr. Ricafort said it may trade from P60.70 to P60.90. — Aaron Michael C. Sy
