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Peso climbs on US jobs, inflation data

Peso climbs on US jobs, inflation data

THE PESO rebounded versus the dollar on Friday on positive US data, which eased worries over the world’s largest economy. 

The local unit closed at P47.70 per dollar, appreciating by 6.5 centavos from its P47.765 finish on Thursday. 

It also strengthened by five centavos against its P47.75 finish on June 4. 

The peso opened Friday’s session at P47.73 against the dollar. Its weakest showing was at P47.74, while its intraday best was at P47.68 versus the greenback. 

Dollars exchanged reached $684.79 million on Friday, inching up from the $680.2 million seen on Thursday. 

The peso appreciated following the release of US jobs and inflation data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort and a trader said. 

“The peso appreciated from broad market views of transitory and elevated US inflation despite the higher-than expected US consumer inflation report,” the trader said in an email. 

US consumer prices rose solidly in May, leading to the biggest annual increase in nearly 13 years as a reopening economy boosted demand for travel-related services, while a global semiconductor shortage drove up prices for used motor vehicles, Reuters reported. 

The pandemic’s easing grip on the economy was also underscored by other data from the US Labor Department on Thursday showing the number of Americans filing new claims for unemployment benefits fell last week to the lowest level in nearly 15 months. 

May’s inflation drivers appear to be temporary, fitting in with Federal Reserve Chair Jerome Powell’s repeated assertion that higher inflation will be transitory. 

The consumer price index (CPI) increased 0.6% last month after surging 0.8% in April, which was the largest gain since June 2009. Food prices rose 0.4%, but gasoline declined for a second straight month. In the 12 months through May, the CPI accelerated 5.0%. That was the biggest year-on-year increase since August 2008 and followed a 4.2% rise in April. 

Inflation could get a boost from the labor market, where layoffs are subsiding. In another report on Thursday, the US Labor Department said initial claims for state unemployment benefits fell 9,000 to a seasonally adjusted 376,000 for the week ended June 5. That was the lowest since mid-March 2020 when the first wave of COVID-19 infections barreled through the country, leading to closures of nonessential businesses. 

Though layoffs are subsiding, claims remain well above the 200,000 to 250,000 range that is viewed as consistent with a healthy labor market. They have, however, dropped from a record 6.149 million in early April 2020. — LWTN with Reuters 

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