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Peso weakens vs dollar on US data
The Philippine peso weakened against the US dollar on Friday, following the release of positive economic data from the United States.
The US Labor Department reported that nonfarm payrolls increased by 943,000 in July, beating expectations of 870,000. The unemployment rate also fell to 5.4%, down from 5.9% in June.
The strong US data boosted the dollar, which rose against most major currencies, including the Philippine peso. The peso fell to 50.15 against the dollar, its weakest level in over a month.
The weaker peso is bad news for Filipino consumers, as it makes imported goods more expensive. It also makes it more expensive for Filipinos to travel abroad, as they will need more pesos to buy foreign currency.
However, the weaker peso is good news for Filipino exporters, as it makes their goods cheaper for foreign buyers. This could help boost the country’s exports, which have been struggling due to the pandemic.
The Philippine government has been trying to boost the country’s exports by offering incentives to exporters and investing in infrastructure. However, the weaker peso could provide an additional boost to the sector.
Despite the weaker peso, the Philippine economy has been showing signs of recovery. The country’s gross domestic product (GDP) grew by 11.8% in the second quarter of 2021, compared to the same period last year. This was the fastest quarterly growth since 1988.
The government has also been ramping up its vaccination campaign, with over 20 million doses administered as of August 5. This could help boost consumer confidence and support the country’s economic recovery.
Overall, while the weaker peso may cause some short-term pain for Filipino consumers, it could provide a boost to the country’s exporters and support the broader economic recovery.