Finance


Peso surges as weak US data weighs on greenback




Posted on April 18, 2015


THE PESO posted further gains versus the dollar on Friday, closing at its strongest level in more than a month due to market sentiment on the string of disappointing data from the world’s largest economy.

The local unit closed at P44.275 against the greenback on Friday, fifteen-and-a-half-centavos stronger than its Thursday finish of P44.43 per dollar.

Yesterday’s close was the unit’s best finish since it closed at P44.25 versus the greenback last March 12.

The peso traded stronger during the day, opening six centavos up at P44.37 versus the dollar. This was just a tad better than its weakest intraday level of P44.375 against the greenback. The local unit surged to close at its strongest point for the day of P44.275 versus the greenback.

Trading volume, however, fell to $499.1 million from the previous session’s $687 million.

A trader interviewed by phone said the peso’s strength was “still due to the series of weaker-than-expected” US data released over the week, as well as the rebound of local equities.

“Mostly weak US data again plus the two-day rebound of the Philippine Stock Exchange index,” the trader said.

MetisEtrade, Inc. analyst Cherica Y. Vicente, for her part, said in an e-mail: “The Philippine peso closed stronger than the US dollar on further signs of less impressive US economic improvement.”

“Last night, data on the number of new building permits and residential buildings that began construction in March was reported to have fallen short of forecast. Building permits was at 1.04 million and housing starts was at 0.93 million less than the 1.08 million and 0.93 million projection respectively. On top of the disappointing US retail sales data this week, the data caused the US dollar to depreciate,” she added on Friday.

US retail sales grew by 0.9% last month, slightly lower than the 1.1% forecast, while the producer price index grew by 0.2%, also lower than the 0.3% month on month expectation.

US manufacturing data also disappointed investors as capacity utilization fell to 78.4% in March from 79% in February, while industrial production also contracted by 0.6% versus the 0.3% expected contraction.

Meanwhile, the local stock market on Thursday snapped a three-day losing streak to close in the green. Gains were extended during the morning session on Friday, but the main index ended slightly down as the market tracked lackluster trading on Wall Street. -- Imee Charlee C. Delavin