The peso slipped against the dollar on Tuesday as market players remained on the sidelines ahead of the release of key US economic data later this week.
The local unit closed 7.5 centavos weaker against the greenback at P58.53 from its P58.455 on Monday, data from the Bankers Association of the Philippines showed.
The currency opened slightly stronger against the dollar at P58.40 in Tuesday's trading session. It climbed to a high of P58.38, while its worst performance was its closing level of P58.53.
On Monday, dollar turnover increased from $1.08 billion to $1.179 billion.
“Peso weakens ahead of potential rise in US retail sales report,” the first trader said in a Email.
“The dollar-peso traded slightly higher but closed at its intraday high due to cautious sentiment ahead of US data,” said another trader. He said the market is awaiting reports on retail sales, non-farm payrolls and inflation.
For Wednesday, the first trader expects the peso to hover between P58.40 to P58.65 per dollar, while the second trader sees it hovering between P58.30 and P58.60.
Meanwhile, the US dollar continued Monday's slide against the yen following Prime Minister Sanae Takaichi's election victory, while it was little changed against European currencies ahead of key economic data due on Wednesday.
The Japanese currency snapped a six-day losing streak on Monday after falling as low as 160 against the greenback, sparking fears of intervention by Japanese authorities to support the yen..
However, analysts also noted that Ms. Takachi's policy, including tax cuts and more fiscal spending, is expected to boost the economy and lift the stock market, which would potentially prompt more dovish Bank of Japan easing, all factors that could support the yen.
The yen rose 0.23% to 155.52 yen against the dollar, after jumping 0.85% a day earlier.
It was up 0.32% against the euro at 185.18 yen, after being broadly unchanged on Monday.
“With Prime Minister Sanae Takachi moving away from a relatively fiscal conservative stance in favor of carefully targeted stimulus, the balance of risks has tilted towards additional tightening from the Bank of Japan,” argued Harvey Bradley, co-head of global rates at Insight Investment.
“Takaichi's planned election aims to consolidate his position, but a realignment among opposition parties could complicate that ambition and should reassure markets that the fiscal outlook is not going to deteriorate meaningfully,” he said.
Investors' focus will be on monthly reports covering US employment and consumer prices which were recently pushed back slightly due to the three-day government shutdown.
White House economic adviser Kevin Hassett said on Monday that US job gains could slow in the coming months due to slower labor force growth and higher productivity. Investors are trying to assess whether the weakness in the labor market has eased.
The dollar index, which measures the greenback against six other currencies, was almost unchanged at 96.90, after hitting a one-week low of 96.789. — AMC Sy with reuters