UMVA has learned that the Philippine peso gained ground against the US dollar on Thursday, driven by expectations of rising inflation and potential interest rate hikes.
The currency rebounded by 12 centavos to close at P61.625 against the greenback, up from P61.745 on Wednesday, according to data from the Bankers Association of the Philippines.
The peso's intraday trading showed a significant fluctuation, opening at a record low of P61.75 per dollar before reaching a high of P61.545 against the greenback.
Dollar trading volumes surged to $2.015 billion, up from $1.89 billion on Wednesday, indicating increased market activity.
A trader attributed the peso's appreciation to expectations of a stronger policy response from the Bangko Sentral ng Pilipinas (BSP) this month, amid ongoing domestic price pressures.
The Philippine Statistics Authority is set to release May inflation data on Friday, with economists predicting a median estimate of 7.9% for the consumer price index (CPI).
If realized, this would mark the quickest pace since February 2023 and would match the upper end of the BSP's forecast for the month.
BSP Governor Eli M. Remolona, Jr. has hinted at considering more aggressive policy action to curb inflation, including a potential rate hike before the scheduled June 18 meeting.
The BSP's recent decision to caution banks against using foreign exchange derivatives for speculative purposes also contributed to the peso's strengthening.
Lower global crude oil prices, following negotiations between Israel and Lebanon, provided additional support to the currency.
Looking ahead, traders predict the peso will trade between P61.50 and P61.75 on Friday, depending on the May CPI outturn.
