Peso may edge sideways against dollar ahead of US jobs, PHL inflation reports

The PESO may look sideways against the dollar this week following stronger than expected US data and as the market awaits the release of key economic reports in the coming days.

The local unit closed the trading week abbreviated at P58.20 per dollar on Friday, down 29 cents from its close of P57.91 on Thursday, data from the Bankers Association of the Philippines said. Philippine financial markets were closed for holidays on Dec. 30, Dec. 31, and Jan. 1.

Week by week, the peso fell by 35.5 centavos from its close of P57.845-dollar on Dec. 27.

The peso fell on Friday following strong U.S. jobless claims data, a trader said in a telephone interview.

The local unit weakened against the stronger dollar in broad expectations that the US Federal Reserve will remain accommodative, said Rizal Commercial Banking Corp. economist. Michael L. Ricafort in a Viber message.

This week, the main market drivers will be the latest US nonfarm payrolls data and the inflation report for December and the full year 2024 Philippine, the trader said.

The trader sees the peso moving between P58 and P58.40 per dollar this week, while Mr. Ricafort expects it to go from P57.90 to P58.40.

The number of Americans filing new claims for unemployment benefits fell to an eight-month low in the past two weeks, pointing to lower layoffs by the end of 2024 and consistent with a healthy labor market, Reuters reported.

A report from the Labor Department on Thursday added to rising economic data, including consumer spending, in bolstering the Federal Reserve’s forecast for interest rate cuts this year. A stable labor market keeps economic growth on track.

Initial claims for federal jobless benefits fell by 9,000 to a seasonally adjusted 211,000 in the week ended Dec. 28, the lowest level since April. Economists polled by Reuters had forecast 222,000 claims last week. – AMCS with Reuters