Peso rebounds ahead of GDP data
THE PESO recovered against the dollar on Wednesday ahead of the release of Philippine gross domestic product (GDP) data for the second quarter.
The local currency closed at P56.20 versus the dollar on Wednesday, strengthening by four centavos from Tuesday’s P56.24 finish, data from the Bankers Association of the Philippines’ website showed.
The local unit opened Wednesday’s session at P56.40 per dollar. Its intraday best was at P56.20, while its weakest showing was at P56.44 against the greenback.
Dollars traded went down to $996.2 million on Wednesday from $1.15 billion on Tuesday.
“The peso recovered today amid local optimism ahead of the Philippine GDP report tomorrow,” a trader said in a Viber message on Wednesday.
A BusinessWorld poll of 21 economists conducted last week yielded a median estimate of 6% for second-quarter GDP growth.
If realized, this would be slower than the 6.4% growth in the first quarter and the 7.5% expansion in the same period in 2022.
This would bring the first-half average to 6.2%, within the government’s 6-7% full-year target.
The Philippine Statistics Authority will release second-quarter GDP data on Thursday, Aug. 10.
The peso was supported by dovish signals from a US Federal Reserve official, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.
Barring any abrupt change in the direction of recent economic data, the US Federal Reserve may be at the stage where it can leave interest rates where they are, Philadelphia Fed President Patrick Harker said on Tuesday, Reuters reported.
The Fed raised borrowing costs by 25 basis points (bps) last week, bringing its target rate to a range between 5.25% and 5.5%.
The US central bank has hiked rates by a cumulative 525 bps since it began its tightening cycle in March last year.
The Federal Open Market Committee will hold its next policy review on Sept. 19-20.
For Thursday, the trader said the peso would likely appreciate further ahead of the GDP report.
The trader expects the peso to move between P56.05 and P56.30 per dollar on Thursday, while Mr. Ricafort expects it to range from P56.10 to P56.30. — A.M.C. Sy with Reuters
