Peso up on profit taking amid hawkish Fed and weaker US home sales data

THE PESO strengthened against the greenback on Thursday amid profit taking on hawkish signals from Federal Reserve officials and weaker US economic data.

The local unit closed at 52.365 pesos to the dollar on Thursday, appreciating 12.5 centavos from its finish of 52.49 pesos on Wednesday, based on data from the Philippine Bankers Association.

The peso opened Thursday’s session at 52.40 pesos against the dollar. Its weakest posting was at P52.45, while its intraday best was at P52.35 against the greenback.

A trader in a Viber message said the peso closed stronger due to profit taking following hawkish signals from Fed officials.

San Francisco Federal Reserve Chair Mary Daly said on Wednesday she supports a broad consensus to raise interest rates to around 2.5% by the end of 2022, Reuters reported.

“Once housing is removed, we need to assess the effects – watching how financial conditions adjust, how much inflation recedes and what remains to be done to ensure sustained expansion,” Ms Daly said.

In March, the Fed raised rates by 25 basis points to begin its tightening cycle.

The peso also appreciated after the release of weaker U.S. home sales data that partially led to a healthy downward correction in the dollar, chief economist at Rizal Commercial Banking Corp said. . Michael L. Ricafort in a Viber message.

Data released Wednesday by the National Association of Realtors showed that sales of existing homes in the United States fell 2.7% to a seasonally adjusted annual rate of 5.77 million units in March. This is the lowest level since June 2020.

Home resales, which make up the bulk of sales, fell 4.5% annually in March.

For Friday, Mr. Ricafort and the trader gave a forecast range of 52.25 to 52.45 pesos per dollar. — LWTN with Reuters

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