Tuesday, July 23, 2024
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THE PESO may move sideways against the dollar this week ahead of the release of the July consumer price index (CPI) report on Friday.

The local currency closed at P54.91 versus the dollar on Friday, weakening by 35 centavos from Thursday’s P54.56 finish, data from the Bankers Association of the Philippines’ website showed.

A week on week, the peso dropped by 16 centavos from its P54.75 close on July 21.

The local unit opened Friday’s session at P54.75 per dollar, which was also its intraday best. Its weakest showing was at P54.92 against the greenback.

Dollars traded went up to $1.1 billion on Friday from the $914.1 million recorded on Thursday.

The peso declined on Friday due to higher global crude oil prices and a wider Philippine budget deficit in June, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Oil prices rose on Friday and notched a fifth straight week of gains as investors were optimistic that healthy demand and supply cuts will keep prices buoyant, Reuters reported.

Bolstered by supply cuts from the OPEC+ alliance announced earlier this month, both oil benchmarks gained nearly 5% for the week — a fifth straight week of gains. The benchmarks are on track to gain over 13% for the month.

Brent crude settled 75 cents higher to $84.99 a barrel, while US West Texas Intermediate crude gained 49 cents to $80.58 a barrel.

Meanwhile, the government’s budget deficit in June rose by 4.58% year on year to P225.4 billion.

In the first half, the fiscal deficit narrowed by 18.17% to P551.7 billion from P674.2 billion a year ago.

For this week, the peso may trade sideways ahead of the release of July inflation data on Friday, Mr. Ricafort said.

A BusinessWorld poll of 17 analysts yielded a median estimate of 4.9% for July inflation.

If realized, this would be below the 5.4% in June but would match the 4.9% seen in April last year.

Still, this would be the 16th straight month that the CPI exceeded the central bank’s annual 2-4% target.

Mr. Ricafort sees the peso trading between P54.60 and P55.10 per dollar this week.

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