Peso back to P55 level vs. US dollar

The Philippine peso bounced back to P55:$1 level on Friday as weak employment data from the United States reduced the greenback’s allure, benefiting the local currency.

The local unit closed at P55.905:$1, gaining 30.5 centavos from Thursday’s finish of P56.21:$1.

This is the strongest for the peso since March 19, when it closed at P55.92:$1.

Security Bank chief economist Robert Dan Roces attributed the local currency’s appreciation to the “weaker-than-expected US JOLTS (Jobs Openings and Labor Turnover) job market data.''

Data from the US Bureau of Labor Statistics showed that job openings in the US in July declined to 7.67 million from 7.91 million in June.

Moreover, the number of hires saw a minimal increase during the period, at 3.5 million from 3.3 million month-on-month.

Roces added that the peso’s strength was also “supported by lower US ADP employment data overnight.”

The ADP employment showed that the US private sector only added 99,000 jobs in August, the smallest gain since January 2021.

“Watch out for the upcoming US unemployment data release later in the day, as it will further impact the USD/PHP,” Roces said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort explained that the “mostly weaker US economic data recently could increase the odds of future Fed (US Federal Reserve) rate cuts in the coming months that could be matched locally.”

“More dovish Fed signals lately also increased the odds of Fed rate cuts, thereby also partly weighing on the US dollar versus major global/Asian currencies,” he said. —VBL, GMA Integrated News