THE PESO declined as the market normalized after large inflows last week. — BW FILE PHOTO

THE PESO weakened back to the P53-per-dollar level on Monday, normalizing after a large inflow to a local firm last week, with markets also unimpressed by economic data.
The local currency closed at P53.295 against the greenback yesterday, shedding 33.5 centavos from the P52.96 close on Friday.
The peso weakened immediately at the start of the session at P53.09 versus the dollar, which was already its best showing for the day. It weakened to as much as P53.3 against the greenback.
The volume of dollars traded was thinner at $666.1 million from $897.5 million on Friday.
A trader said the peso’s weakening was due to profit-taking following last week’s strong inflows.
“I think the market was trying to reduce…their position. There’s a big flow last week — I think that was the big contributor. A big factor was the $600 million when we got that inflow last week,” the trader said, referring to the San Miguel Food and Beverage, Inc.’s follow-on offering last week that pushed the peso to the P52-per-dollar level.
“If you look at the data for the Philippines, in particular what we saw was inflation at 6.7%, trade deficit widened, and the GDP (gross domestic product) growth moderated. Technically if you look at the figures it’s not enough to merit a strong peso move.”
Another trader said the market was will uncertain on the Bangko Sentral ng Pilipinas’ (BSP) policy action during its meeting on Thursday.
“For the next few days we’re going to see the peso stabilize. Some say that the month-on-month inflation has gone down and that the weak GDP growth would warrant a hold in policy rates. But inflation is still elevated,” another trader said.
“It’s still unsure, some expect to pause, some say 25 basis points on December, following the US. So we’re going to look at that but expect the peso to trade within the P53-P54 level,” the trader added. — E.J.C. Tubayan

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