Peso ends flat ahead of Powell testimony

National Financial Solution > Business Report > Peso ends flat ahead of Powell testimony

THE PESO barely moved versus the dollar on Tuesday ahead of a scheduled testimony by US Federal Reserve chief Jerome Powell. — BW FILE PHOTO

THE PESO moved sideways versus the greenback on Tuesday as the market waited for more signals from the US Federal Reserve on its policy tightening plans.

The local unit closed at P48.70 per dollar on Tuesday, barely changed from its P48.695 finish on Monday, data from the Bankers Association of the Philippines showed.

The peso started Tuesday’s trading session at P48.68 versus the dollar. Its weakest showing was at P48.76, while its intraday best was at P48.66 against the greenback.

Dollars traded declined to $1.067 billion on Tuesday from $1.338 billion on Monday.

The peso was flat as investors were waiting for remarks from the US central bank’s chief, which could contain more hints about the Fed’s planned unwinding of its easy monetary policy, a trader said.

Fed Chairman Jerome Powell was set to speak before the US House Committee on Coronavirus Crisis on Tuesday regarding their latest assessment of the economy.

In his prepared testimony released by the Fed on Monday, Mr. Powell said the economy continues to show “sustained improvement” and ongoing recovery in the job market but has seen inflation “increase notably in recent months, Reuters reported.

“We at the Fed will do everything we can to support the economy for as long as it takes to complete the recovery,” Mr. Powell said.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the peso’s slight depreciation to the continued increase in oil prices.

Reuters reported that oil prices edged higher due to expectations of quick recovery in demand. Brent crude futures for August climbed 29 cents or 0.4% to $75.19 a barrel by 0658 GMT.

Meanwhile, US West Texas Intermediate (WTI) crude for July stood unchanged at $73.66 per barrel but rose by 13 cents to 0.2% to $73.25 a barrel for August.

For Wednesday, both Mr. Ricafort and the trader gave a forecast range of P48.60 to P48.80 versus the dollar. — LWTN with Reuters

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