Peso weakens as US consumer price index hits multi-year high

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The peso retreated versus the greenback on Thursday following faster than expected US inflation.

The local unit closed at P50.165 per dollar on Thursday, depreciating by 9.6 centavos from its P50.069 finish on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened Thursday’s session weaker from its previous close at P50.18 per dollar. Its worst showing was at P50.24, while its intraday best was at P50.13 against the greenback.

Dollars traded increased to $1.14 billion on Thursday from $1.016 billion on Wednesday.

The peso dropped from its previous close due to elevated consumer inflation in the US, a trader said in an e-mail.

The US Labor department on Wednesday reported the consumer price index rose 0.9% last month, Reuters reported. This brought the annual increase in the consumer price index to 6.2%, which was the biggest since November 1990.

Losses at the local stock market also caused risk-off sentiment in the currency market, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

For Friday, Mr. Ricafort gave a forecast range of P50.05 to P50.25, while the trader expects the local unit to move within P50.05 to P50.30 per dollar. — LWTN with Reuters