THE PESO extended its climb on Friday amid slower inflation and bets of another rate cut in the United States.
The local unit ended at P51.73 against the greenback on Friday, gaining 8.5 centavos from its P51.815-to-a-dollar close on Thursday.
Week on week, it climbed 14 centavos from the P51.875 close on Sept. 27.
The peso opened at P51.70 versus the dollar. It weakened to as low as P51.77 during the session, while its intraday best was at P51.65 against the greenback.
Dollars traded slipped to $1.12 billion from $1.186 billion on Thursday.
“The peso appreciated from market optimism following the release of softer-than-expected Philippine inflation report for September 2019,” a trader said in an email.
Headline inflation eased further to 0.9% in September from the 1.7% print in August on the back of softer prices in nearly all commodities. Last month’s rate was also slower from the record-high 6.7% logged in September 2018.
Another trader attributed the dollar’s weakness to US non-manufacturing data.
“There have been signals that the market is trying to grasp a US slowdown. The market is also expecting for one or two more rate cuts this year,” the second trader said in a phone call.
US services sector activity slowed to a three-year low in September amid rising concerns about tariffs, suggesting that trade tensions were spilling over to the broader economy.
The Institute for Supply Management said its non-manufacturing activity index fell to a reading of 52.6 in September, the lowest since August 2016, from 56.4 in August. A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of US economic activity. — LWTN with Reuters