Peso flat ahead of US data

The local currency closed at P46.755 against the greenback at the end of Tuesday’s trade, slipping from its previous finish of P46.75 per dollar.

The peso opened trading session at P46.72 per dollar. It hit a high of P46.65 per dollar and dropped to as low as P46.785 against the greenback during yesterday’s trade.

Dollars traded increased to $572.5 million from $503.1 million, data from the Philippine Dealing System showed.

“The peso moved sideways as investors await more clues out of the US to confirm views of a rate hike in the US this June,” a trader interviewed by phone said.

Another trader said: “Everyone’s on a wait-and-see mode ahead of jobless claims and employment data towards the end of the week.”

One trader said the dollar-peso pair will likely move within the P46.60 to P46.85 range today, while another trader put the support at P46.50 against the greenback and the resistance at P46.80 per dollar.

In contrast, emerging Asian currencies were largely up on Tuesday though most regional units were set to post losses in May, dragged by expectations of an imminent US interest rate hike with the Chinese yuan on course for the worst month since Beijing’s surprise devaluation in August last year.

Indonesia’s rupiah gained for the day on sustained foreign stock buying, while South Korea’s won ticked higher on exporters’ demand for month-end settlements.

Those gains came as emerging Asian currencies nursed monthly losses, mainly reflecting Federal Reserve Chair Janet Yellen and top policymakers in the US central bank supporting a rate increase in the near term.

“We’ll get some pull back (in dollar/Asia foreign exchange) going into US payrolls on Friday but as long as that meets expectations, I expect USD to strengthen versus Asia into FOMC,” said Sean Yokota, head of Asia strategy at Scandinavian bank SEB in Singapore.

Yokota, however, said the dollar may weaken after the Federal Open Market Committee meeting as investors have priced in a near-term US tightening.

“Assuming we don’t get a blockbuster payroll number, which is 300K or more, we think it will be buy the rumor, sell the fact and USD will weaken post FOMC,” Yokota said.

Economists expected US non-farm payrolls to have risen by 166,000 this month after an increase of 160,000 in April, according to a Reuters poll.

China’s yuan has fallen 1.6% on the dollar so far this month — the largest monthly slide since August last year when policy makers unexpectedly devalued the currency.

The central bank on Tuesday set its daily guidance rate at a five-year low for a second session, while traders grappled with fresh signs that the recovery in the world’s second-largest economy may be losing steam.

Source: Bworld online