Philippine peso weakens ahead of inflation data, U.S. policy uncertainty
The Philippine peso extends its decline against the dollar on Wednesday as markets brace for October inflation data and assess broader macroeconomic risks. Trading activity also picks up as investors react to expectations of faster price growth and uncertainty over the U.S. policy outlook.
Highlights
- The peso weakens to P63.535 per dollar, down 6.5 centavos from Tuesday, as trading volume rises to $1.32 billion from $1.04 billion.
- Anticipation of the Philippine Statistics Authority's October inflation data release on Nov. 5 prompts concerns over stagflation risks, weighing on the peso.
- Uncertainty following the Democratic sweep of both U.S. House and Senate adds to volatility, with Thursday's peso trading range expected between P63.40 and P63.65.
Currency moves and inflation outlook
As reported by BusinessWorld Online, the peso closes at P63.535 per dollar, weaker by 6.5 centavos from Tuesday's P63.47 finish, based on Bankers Association of the Philippines data.The local currency opens the session at P63.57 per dollar, reaches an intraday best of P63.42 and falls to as low as P63.60. Dollar trading volume rises to $1.32 billion from $1.04 billion.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort says in a Viber message that the peso declines before the scheduled release of October inflation data, with an expected pickup in inflation potentially adding to stagflation risks. The Philippine Statistics Authority is set to release the October inflation data on Thursday, Nov. 5.
Market sentiment and near-term trading range
A trader says in a Viber message that the peso weakens on uncertainty after the Democratic sweep to control both the U.S. House and Senate, a shift that could significantly alter the U.S. policy trajectory over the next two years.For Thursday, Mr. Ricafort sees the peso moving between P63.45 and P63.65 against the dollar, while the trader expects a range of P63.40 to P63.65. The outlook suggests the local currency remains sensitive to both domestic inflation signals and external political developments.
In our earlier article on the Philippine stock market rebound alongside a record-low peso, we noted that the PSEi recovered on bargain hunting even as the currency slid to a new all-time low near the P63-per-dollar level. We also highlighted how shifting investor flows and broader risk sentiment kept markets cautious, with close attention on peso moves and macro developments.
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