Peso slips on mixed US jobs data

October 10, 2017 - 1:09 AM
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philippine peso bills
A money changer counts Philippine pesos in Manila in file photo. (The STAR/KJ Rosales)

MANILA – The peso dipped on Monday as strong US unemployment data revived bets of a December Federal Reserve policy move despite soft non-farm payroll figures.

The local currency closed at P51.245 against the greenback, down 9.5 centavos from the P51.15-per-dollar finish during Friday’s session.

The peso already weakened as session opened, standing at P51.20 per dollar. Its peak for the day was at P51.09, while its intraday trough was at P51.25 versus the greenback.

Dollars that changed hands surged to $657.8 million from the $498.8 million recorded last Friday.

Traders said the dollar’s strength was due to mixed key US economic data that was consistent with a rate hike planned in December.

“Basically dollar was higher, although non-farm payroll data last Friday went down, unemployment data also went down, so it negated the effect of weaker non-farm payroll data,” a trader said in a phone interview yesterday. “So it’s in line with the December rate hike.”

US employment fell in September for the first time in seven years as Hurricanes Harvey and Irma left displaced workers temporarily unemployed and delayed hiring, the latest indication that the storms undercut economic activity in the third quarter.

The US Labor Department said on Friday non-farm payrolls decreased by 33,000 jobs last month amid a record drop in employment in the leisure and hospitality sector. The decline in payrolls was the first since September 2010.

But underlying details of the closely watched employment report were upbeat.

The unemployment rate hit a more than 16-1/2-year low of 4.2% and annual wage growth accelerated to 2.9%.

Today, the market is seen to trade quietly amid lack of fresh leads, unless tensions rise anew between US and North Korea.

“The market is still risk-off due to tension from the US-North Korea,” the first trader said.

“I see quiet trading. I don’t foresee any big moves for now,” said the second trader.

The second trader said the peso may continue its decline as it broke the P51.20 per dollar resistance level.
Both traders estimate a P50.80 to P51.30 per dollar range today.