THE PESO strengthened versus the dollar on Monday, even after hitting the P55 level intraday, on profit taking after last week’s decline and gains at the local stock market.

The local unit closed at P54.78 on Monday, rising by 20.5 centavos from its P54.985 finish on Friday, Bankers Association of the Philippines data showed.

The peso opened Monday’s session weaker than its Friday close at P54.93 versus the dollar. Its lowest showing for the day was at P55.15 against the greenback, its weakest level in over 16 years, or since the peso closed at P55.26 on Oct. 25, 2005. Meanwhile, the peso’s intraday best was its close of P54.78.

Dollars exchanged declined to $1.17 billion on Monday from $1.40 billion on Friday.

“The peso exchange rate strengthened today…, considered a healthy correction…after the peso reached as low as P55.15 earlier in the day as global oil prices recently lingered among one-month lows and the 10-year US Treasury yield lingered among two-week lows,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message on Monday.

“The peso also stronger after the recent relief rally in the local and US/global stock markets after the US University of Michigan gauge of long-term (5-10 years) consumer expectations revised to 3.1% (from a preliminary 3.3%) but still the highest in more than 11 years or since March 2011,” Mr. Ricafort said.

He added that most currencies in the region ended stronger against the dollar on Monday.

“The peso strengthened amid a potentially weaker US durable goods report,” a trader added in an e-mail.

Philippine shares ended higher on Monday on bargain hunting after the market’s decline last week and improved sentiment on the back of the positive performance of Wall Street over the weekend.

The benchmark Philippine Stock Exchange index rose by 21.26 points or 0.34% to end at 6,238.82 on Monday, while the broader all shares index improved 14.84 points or 0.44% to close at 3,352.47.

Wall Street rebounded on Friday as oil prices eased, tempering fears of a recession in the US due to aggressive Federal Reserve tightening amid higher inflation.

The Dow Jones Industrial Average improved 823.32 points or 2.68% to end at 31,500.68; the S&P 500 climbed 116.01 points or 3.06% to finish at 3,911.74; and the Nasdaq Composite rose 375.43 points or 3.34% to close at 11,607.62.

As of Monday’s close, the peso has declined by P3.78 or 7.41% versus the dollar from its Dec. 31, 2021 finish of P51. For this month so far, the peso has lost P2.41 or 4.6% in value from its May 31 close of P52.37 a dollar.

“Since the start of 2022, the peso’s depreciation of 7.4% is now the worst in ASEAN vs. 6.5% for the Thai baht, 5.7% for the Malaysian ringgit, 5.2% for the Chinese yuan, 3.8% for the Indonesian rupiah,” Mr. Ricafort said.

For Tuesday, the trader said the peso may continue to rebound on profit taking. The trader expects the local unit to move within P54.65 to P54.85 per dollar, while Mr. Ricafort gave a forecast range of P54.60 to P54.90. — K.B. Ta-asan