Peso up on easing COVID-19 cases
THE PESO strengthened against the dollar on Monday amid easing coronavirus disease (COVID-19) cases and expectations of steady inflation last month.
The local unit closed at P47.695 versus the dollar on Monday, strengthening by 10.5 centavos from Friday’s finish of P47.80, data from the Bankers Association of the Philippines’ website showed.
This is the peso’s best close in over four years or since it finished at the same rate on Sept. 15, 2016.
The peso opened Monday’s session stronger at P47.75 against the dollar. It dropped to as low as P47.76, while its intraday high was at P47.69 versus the greenback.
Dollars traded went down $878.50 million on Monday from the $1.056 billion seen on Friday.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the peso continued to appreciate ahead of the government’s decision on the quarantine classification for June.
Malacañang was expected to announce new lockdown measures for June as prevailing restrictions were only set to be in effect until May 31.
Investors are hoping for a slight easing in the lockdown so the economy can reopen further, boosting recovery prospects.
The Health department on Monday reported 6,684 new coronavirus disease 2019 (COVID-19) cases, bringing the country’s infection tally to 1.23 million.
Active cases were at 54,290, while deaths stood at 20,966.
The Health department said COVID-19 cases in NCR Plus have seen a steady decline recently.
Meanwhile, a trader said the peso climbed versus the dollar on expectations of steady inflation in May.
The Bangko Sentral ng Pilipinas expects headline inflation to have settled within 4% to 4.8% in May, it said yesterday.
A BusinessWorld poll of 17 analysts last week yielded a median estimate of 4.5% for May headline inflation.
If realized, this would mark the third straight month of steady inflation. However, it is still beyond the central bank’s annual 2-4% target and is much quicker than the 2.1% print a year earlier.
The Philippine Statistics Authority will release official inflation data on June 4.
The trader said aside from inflation, the market will watch out for US economic reports due to be released later this week.
The trader expects the peso to move between P47.70 and P47.90 versus the dollar, while RCBC’s Mr. Ricafort gave a forecast range of P47.65 to P47.80. — IBC
