Politics

Peso slips on weak US data

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JULIAN PAOLO DAYAG-UNSPLASH

THE PESO slipped against the dollar on Thursday as weaker economic data from the United States fueled recession fears.

The local unit closed at P54.63 per dollar on Thursday, inching down by a centavo from Wednesday’s P54.62 finish, data from the Bankers Association of the Philippines’ website showed.

The peso opened Thursday’s session at P54.70 versus the dollar. Its worst showing was at P54.78, while its intraday best was at P54.53 against the greenback.

Dollars exchanged dropped to $1.25 billion on Thursday from $1.427 billion on Wednesday.

The peso inched down on weaker US retail sales and manufacturing data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso weakened slightly amid lingering market concerns of a near-term US recession this year,” a trader likewise said in an e-mail.

US retail sales fell by the most in a year in December, pulled down by declines in purchases of motor vehicles and a range of other goods, putting consumer spending and the overall economy on a weaker growth path heading into 2023, Reuters reported.

The second straight monthly decrease in retail sales, which are mostly goods, is undercutting production at factories. Manufacturing output recorded its biggest drop in nearly two years in December, while monthly producer prices also tumbled, other data showed on Wednesday.

Retail sales plummeted 1.1% last month, the biggest drop since December 2021. Data for November was revised to show sales decreasing 1% instead of 0.6% as previously reported. Retail sales rose 6% year on year in December.

A separate report showed manufacturing output dropped 1.3% in December, the largest decline since February 2021, and production in the prior month was much weaker than initially thought.

For Friday, the trader said the peso could strengthen anew following the release of US jobless claims data.

The trader sees the peso moving between P54.50 and P54.75 a dollar on Friday, while Mr. Ricafort gave a narrower P54.55 to P54.75 forecast range. — AMCS with Reuters