Manila, Philippines – The peso appreciated against the greenback to its best finish in nearly three weeks on bets the tamer-than-expected US inflation report leaves intact the case for a Federal Reserve rate cut next month.
The local currency finished Wednesday’s session stronger by 33 centavos at P56.72 per dollar, according to spot currency market data. The last time the peso courted this level was on July 24, when it settled at P56.65 against the greenback.
The dollar slipped to a two-week low on Wednesday in the wake of the tame US inflation reading and with President Donald Trump’s attempts to extend his grip over US institutions undermining the currency.
The dollar index, measuring the currency against a basket of peers, dipped to 97.76, its lowest since July 28, extending its 0.5 percent fall on Tuesday.
US consumer prices increased marginally in July, data showed on Tuesday, in line with forecasts and as pass-through from Trump’s sweeping tariffs to goods prices has so far been limited.
Also eroding investor confidence in the dollar were Trump’s fresh attempts to undermine Fed independence after White House spokeswoman Karoline Leavitt said on Tuesday the US president was considering a lawsuit against Fed Chair Jerome Powell in relation to his management of renovations at the central bank’s Washington headquarters.
Trump has been at loggerheads with Powell and repeatedly lambasted the Fed chair for not easing rates sooner.
