Peso flat ahead of holidays
THE PESO closed flat against the greenback on Monday as investors stayed on the sidelines ahead of the upcoming holidays and following data showing a narrower budget deficit in February.
The local unit ended trading at P50.72 per dollar on Monday, unchanged from its Friday finish, according to data from the Bankers Association of the Philippines.
The peso opened Monday’s session at P50.72 against the dollar. Its weakest showing for the day was at P50.85, while its intraday best was at P50.65 versus the greenback.
Dollars traded climbed to $357.07 million from the $270.5 million seen last Friday.
A trader said trading was relatively quiet as the market remained cautious ahead of the Holy Week holidays.
“There is not much done over the weekend and so far, I think the market is cautious ahead of the Holy Week as we have a shortened trading,” the trader said in a phone call.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso remained steady following data on the government’s budget deficit.
“The peso exchange closed steady, among the strongest in three weeks and in two years after the latest budget deficit data that remained relatively narrower,” Mr. Ricafort said in a text message.
Data from the Bureau of the Treasury showed the government’s budget deficit in February settled at P37.6 billion, narrowing 50.77% from the P76.4 billion seen in February 2019 and a reversal of the P23-billion surplus in January.
Mr. Ricafort added that the peso was steady on the back of expectations of slower inflation.
“The markets are also anticipating some easing in the inflation data due this Tuesday, April 7,” he said.
A BusinessWorld poll of 11 economists held last week yielded a 2.3% median estimate for March headline inflation, closer to the lower end of the BSP’s 2-2.8% estimate. Analysts attributed the expected easing to a drop in oil prices that likely offset the partial uptick in food costs caused by a surge in demand due to the enhanced community quarantine in Luzon.
This Tuesday, the trader expects the peso to move within the P50.60 to P51 band, while Mr. Ricafort sees the peso playing around the P50.55 to P50.85 levels versus the dollar. — L.W.T. Noble
