Philippine Peso Slips Before ECB and Fed Meetings; Bonds Gain
The ECB may unveil additional economic stimulus tomorrow after President Mario Draghi said on July 26 that policy makers are “ready to do whatever it takes to preserve the euro.” Fed Chairman Ben S. Bernanke will probably forgo announcing a third round of large-scale asset purchases this week, and is likely to wait until September, according to median estimates of economists in a Bloomberg News survey. China reported today that manufacturing expanded at the slowest pace in eight months.
The major central banks “will definitely do something, but it’s a matter of whether it’s a game changer,” said Leong Sook Mei, the regional head of global currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. in Singapore “There’s some degree of caution.”
The peso dropped 0.1 percent to 41.762 per dollar in Manila, according to Tullett Prebon Plc. The currency touched 41.74 yesterday, the highest level since July 20. One-month implied volatility, a measure of exchange-rate swings used to price options, declined 25 basis points, or 0.25 percentage point, to 6 percent.
The peso has appreciated 4.9 percent this year, the best performance among Asia’s 11 most-active currencies, data compiled by Bloomberg show.
China’s Purchasing Managers’ Index fell to 50.1 in July from 50.2 in June. That’s less than the 50.5 median estimate in a Bloomberg News survey of 24 economists. A reading above 50 indicates expansion.
The yield on the government’s 5.875 percent bonds due March 2032 fell three basis points to 5.63 percent, according to prices from Tradition Financial Services.
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