Foreign exchange
• PREVIOUS week: the local currency traded further at the lower band of the 44 territory, indicating continuous strength against the US dollar. The peso started trading at 44.115 against the greenback at the start of the trading week, which further appreciated to 44.06 to a dollar on Tuesday. Tuesday’s peso value is the strongest that the peso has been against the dollar since mid-September last year. On Wednesday, however, the peso snapped its 10-day appreciating trend to slightly depreciate back to 44.085 to a dollar. The peso further corrected on Thursday to 44.11 to a dollar, and ended the week with a 3-centavo appreciation at 44.08. The total traded volume for the week is at about $3.519 billion, larger than the $3.2 billion seen in the previous week.
• Week ahead: Traders say the peso is still likely to sustain its low 44 territory trading against the dollar on the back of the central bank’s intervention. Markets will also look for fresh leads on trading in the next week, including the country’s inflation and economic data releases in the US.
Inflation
• December inflation: The Philippine Statistics Authority (PSA) reported last month that inflation in December hit 2.7 percent—the lowest inflation for the country in 15 months, or since September 2013, when inflation also hit 2.7 percent. It is also the fourth consecutive month in the downward trend of inflation in the country. The lower inflation in the last month of 2014 was attributed to the annual decreases in the indices of housing, water, electricity, and other fuels and transport.
• January inflation: Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. forecast inflation to fall between 1.8 percent and 2.7 percent in January this year. The largest contributing factor to the deceleration of inflation is the steep decline in oil prices. Several economists also forecasted lower inflation for the month, ranging from 1.9 percent to 2.4 percent.