THE PESO bounced back to the P50-per-dollar level on Thursday despite investors’ flight to safe havens amid the coronavirus disease 2019 (COVID-19) scare.
The local currency strengthened by 22 centavos during Thursday’s trading session to end at P50.815 against the greenback from the P51.035 close seen on Wednesday, based on data from the Bankers’ Association of the Philippines.
The peso started the session at P51.02 against the greenback, appreciating to as much as P50.78 per dollar while weakening to as low as P51.04.
Total volume of dollars traded yesterday inched down to $1.42 billion from the $1.43 billion recorded on Wednesday.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said he was expecting the peso to weaken further yesterday despite 2019 budget deficit turned out to be bigger than the full-year target.
“I was expecting the peso to extend its weakness today, but it has moved the other way. Its resilience is largely supported even as the budget deficit was bigger that what was targeted,” Mr. Asuncion said on Thursday.
Government data showed the budget deficit widened to P660.2 billion in 2019 to breach the P620-billion program for the year and posting a 18.27% increase from the P558.3-billion gap seen in 2018.
The budget gap translated to 3.55% of gross domestic product (GDP), which was past the 3.25% ceiling for the year and also higher than the 3.2% gap recorded the year prior.
A trader attributed the stronger peso to “profit-taking by market participants near the 51-peso level after few days of safe-haven demand which drove the peso to recent lows.”
Mr. Asuncion said despite the outbreak scare around the globe, the peso still remained “resilient” as investors perceive the economy to be less vulnerable to the impact.
“The local currency might weaken (today, Friday) ahead of likely firm US durable goods and GDP growth reports overnight,” the trader added.
For today, Mr. Asuncion expects the peso to trade within P50.80-P51.10 per dollar, while the trader sees it ranging from P50.70-50.90 against the greenback. — Beatrice M. Laforga