The peso was largely stable before the data release

The PESO can broadly stand firm against the dollar this week, ahead of the release of key economic data and expectations of a delayed start to the Bangko Sentral ng Pilipinas (BSP) easing cycle.

The local unit closed at P56.53 per dollar on Friday, down three centavos from Thursday’s P56.50, data from the Bankers Association of the Philippines showed. Week after week, the peso also weakened from its closing rate of P56.50 on April 5.

The peso devalued following aggressive signals from U.S. Federal Reserve officials after higher-than-expected U.S. consumer price index (CPI) data, Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said. in a Viber message.

The ranks of the Federal Reserve officials saying there’s no rush to cut rates continue to grow, while US is still too hot for comfortFThis is raising concerns at home and casting a shadow over expectations for policy easing abroad, according to Reuters.

“There is no clear need to adjust monetary policy in the very near term,” New York Fed President John Williams told reporters on Thursday, a day after disappointingly strong US consumer prices.FThe situation prompted traders and some analysts to predict a later start to Fed rate cuts, and probably less.

“Recent data suggests that it may take more time than I previously thought to gain more confidence in the downward trajectory of inflation before policy starts to ease,” Boston Fed President Susan Collins said on Tuesday.Fa fervent venue in New York, adding that a strong labor market “also reduces the urgency to ease.”

The two were among a number of U.S. central bankers who have expressed caution in recent days about moving too quickly to cut rates if a rate cut is imminentFThe situation appears to be — at best — about what Fed Chairman Jerome H. Powell has called a “bumpy” road back to the central bank’s 2% annual target.

InFThe economy is proving to be a tougher problem than US central bank officials expected just a few months ago, while other measures of the economy show little sign of slowing. This combination has further encouraged the expected start of an easing cycle.

Thomas Barkin, president of the Richmond Fed, who had already expressed concerns about the breadth of interest ratesFThat it is difficult to reconcile with a short-term shift to interest rate cuts, said Thursday that the latest figures have not increased my doubts.FThe idea was that price pressures were easing on a broader basis across the economy.

US Consumer Price Index (CPI) data came in stronger than expected in March, prompting a broad revision of expectations about when the Fed might cut interest rates this year. Financial markets are now pricing in a start of Fed rate cuts in July or September, compared to an earlier view from June.

The CPI rose 0.4% last month, after rising by the same margin in February, according to the Labor Department’s Bureau of Labor Statistics.

In the 12 months to March, the CPI rose by 3.5%, the highest level since September. The CPI also received a boost as last year’s low value disappeared from the calculation. In February, interest rates rose by 3.2%. Economists polled by Reuters had forecast the CPI to rise 0.3% this month and rise 3.4% year-on-year.

For this week, Mr Ricafort said the main driver for currency trading will be the remittances data to be released on Monday (April 15) and the balance of payments report on Friday (April 19).

Markets also expect the BSP to extend its aggressive pause, which would help support and stabilize the exchange rate, Mr. Ricafort added.

The Monetary Board’s next policy meeting is on May 16.

BSP Governor Eli M. Remolona Jr. said last week that the central bank is leaning toward “a little more aggressiveness” as upside risks to the economyFlation has deteriorated.

The BSP would not be able to cut interest rates until 2011 Ffirst quarter of 2025 if these risks are not contained, Mr Remolona added.

During last week’s policy review, the Monetary Board kept its policy rate steady at a nearly 17-year high of 6.5% for the fourth time in a row.

Chief Economist Robert Dan J. Roces and Mr. Ricafort of Security Bank Corp. expect the peso to move between P56.30 and P56.70 per dollar this week. — LMJC Jocson of Reuters