THE PESO succumbed to the dollar’s strength on Friday on data showing a higher unemployment rate and lower-than-expected inflation and the prolonged spread of the coronavirus disease 2019 (COVID-19).
The local unit ended trading at P50.64 versus the dollar, shedding 5.5 centavos from its P50.585 close on Thursday, according to data from the website of the Bankers’ Association of the Philippines.
Week-on-week, however, the local currency climbed 33 centavos from the P50.97-to-a-dollar performance seen on Mar. 2.
The peso opened Friday’s session at P50.65 versus the dollar. Its weakest showing for the day was at P50.77, while its strongest was at P50.61 against the greenback.
Dollars traded rose to $1.389 billion from $945.45 million on Thursday.
According to a trader, the peso’s weakness on Friday was a “delayed reaction” after some weak data released on Thursday.
“Kasi ‘di ba on Thursday, may data na bumagsak ‘yung employment natin (Data released Thursday showed the unemployment rate went up), at saka (and also a) lower-than-expected inflation rate, so theoretically that would mean weak peso, stronger dollar but we stayed on a minimal range on Thursday,” a trader said in a phone call.
The Philippine Statistics Authority (PSA) reported on Thursday that headline inflation in February slowed to 2.6% from the 2.9% pace in January, on the back of easing food, transport, and utility prices. This headline inflation print is closer to the lower end of the 2.4-3.2% inflation forecast range penciled by the central bank last week.
This also compares to the three percent inflation estimate from a BusinessWorld poll of 17 economists held last week.
Also on Thursday, preliminary data from the Labor Force Survey (LFS) showed the country’s unemployment rate as of January was unchanged at 5.3% from the same period of 2019.
A closer look at the data, however, showed the number of jobless in the country went up by 106,651 to 2.39 million in January from 2.28 million in the same LFS round last year.
Meanwhile, another trader said the peso’s close on Friday came on the back of risk-off sentiment due to the virus spread.
“The local currency weakened from safe-haven demand on renewed coronavirus concerns in the US following newly-reported cases in New York and San Francisco,” the second trader said in an email.
COVID-19 has killed more than 3,330 people and infected over 97,000 around the world. — L.W.T. Noble