BW FILE PHOTO

THE PESO climbed to a near three-week high against the dollar on Thursday amid weak US data that bolstered bets of further US Federal Reserve cuts.

The local unit closed at P56.25 per dollar, jumping by 11.5 centavos from its P56.365 finish on Wednesday, Bankers Association of the Philippines data showed.

This was the peso’s strongest close in nearly three weeks or since it finished at P56.21 on June 13, or the start of the 12-day Israel-Iran conflict.

The peso opened Thursday’s session slightly stronger at P56.33 against the dollar. It traded better than Wednesday’s close the entire day as its worst showing was at just P56.34, while its intraday best was at P56.21 versus the greenback.

Dollars exchanged went down to $1.46 billion on Thursday from $1.59 billion on Wednesday.

“The dollar-peso closed lower following the release of softer private payrolls and ADP data, fueling bets of another Fed cut. Expectations for nonfarm payrolls tonight are also lower, which resulted in dollar selling,” a trader said in a phone interview on Thursday.

The peso was also supported by easing trade tensions after US President Donald J. Trump announced a trade deal with Vietnam, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Friday, the trader expects the peso to move between P56.10 and P56.40 per dollar, while Mr. Ricafort sees it ranging from P56.15 to P56.35.

The dollar remained close to this week’s 3-1/2-year lows on Thursday ahead of a key jobs report, and as a US-Vietnam trade accord fanned expectations for other potential deals ahead of July 9 when US tariffs take effect, Reuters reported.

The pound edged higher by 0.2% and last fetched $1.3665, while the euro was muted at $1.180, still near the September 2021 top it hit earlier this week. The yen was a tad weaker at 143.80 per dollar.

The US dollar index, which measures the greenback against six other currencies, was flat at 96.748, remaining close to the 3-1/2-year lows it has been rooted to this week. The index is on course for a 0.5% drop for the week.

All eyes are on the US Labor department’s comprehensive employment report for June, due for release on Thursday ahead of the July 4 holiday, which is expected to show that unemployment edged up to a more than a 3-1/2-year high of 4.3%, according to economists polled by Reuters.

Wednesday’s private survey painted a grim picture of the labor market, pushing traders to shift expectations of when the Federal Reserve will lower interest rates. Traders are pricing in a 25% chance of a cut in July versus 19% a day earlier, data compiled by LSEG showed.

Meanwhile, ahead of the July 9 tariff deadline, Mr. Trump said the United States had struck a deal with Vietnam and that he could push other countries to reach similar agreements.

Although details were scant, Mr. Trump said Vietnamese goods would face a 20% tariff and trans-shipments from third countries through Vietnam will face a 40% levy.

The Vietnamese dong slid to a record low, with UBS analysts suggesting the passing of tariff costs to exporters will likely be mitigated by the central bank through the allowance of a steady depreciation of the dong.

Progress on other deals has been slow. Japan has invoked national interests as talks with the US struggled, while South Korea’s President Lee Jae Myung on Thursday said negotiations were looking difficult and that he could not say whether talks would conclude by next Tuesday. — A.M.C. Sy with Reuters