THE PESO strengthened versus the dollar on Friday to log its best showing in a week, as market players unwound their long positions and amid disappointing economic data in the United States.
The local unit closed at P53.34 against the greenback, 17.5 centavos stronger than the P53.515-per-dollar finish logged on Thursday. This is the peso’s strongest performance since June 22, when it closed at P53.28.
The peso traded generally stronger on Friday as it opened at P53.48. It touched P53.50 against the dollar as its intraday peak and hit P53.29 as its lowest point before settling at the closing rate.
Sought for comment, two traders said the peso moved in sync with other currencies in the region.
“The peso closed lower in tandem with region,” one trader said by phone, noting that players are actually unwinding long positions which they took as the peso touched a fresh 12-year low.
Another trader pointed out that easing geopolitical concerns may have allowed some recovery for Asian currencies including the peso.
“The peso finished stronger (on Friday) after trade concerns abroad started to calm down and following softer-than-expected US economic data last night,” one trader said via e-mail.
Reuters reported that US economic growth was revised downward to 2 percent in the first quarter, slower than the initial 2.2% estimate amid weaker consumer spending.
Dollars traded on Friday amounted to $855.4 million, higher than the $621.49 million that exchanged hands the previous day.
The peso is among the worst performers among Asian currencies, having depreciated by 7.42% year-to-date versus the dollar according to the Department of Finance (DoF). This is second to the Indian rupee which has slipped by 7.46%, and compares to a 2.66% average depreciation among Asian currencies.
Still, it maintained that this is not a sign of economic weakness, as the Philippines continues to be well-positioned against global financial shocks.
“In an environment of global uncertainty where domestic macroeconomic fundamentals are sound… the exchange rate should move flexibly so that economic players are able to adjust promptly to market dynamics, thus sustaining economic growth,” the DoF said in an economic bulletin.
It cited above-6% growth, hefty dollar reserves, “financeable” trade deficits and declining debt ratios as sources of fiscal strength. — Melissa Luz T. Lopez