THE peso was little changed on Friday, with market participants awaiting leads pending the release of key data.
The peso ended the week at P52.095 , little changed from its P52.10 finish on Thursday.
The peso opened weaker at P52.16 then touched a low of P52.17. It rebounded to a high of P52.09 against the dollar before settling at the closing rate.
Traders isaid trading was quiet ahead of key data that would serve as catalysts for further foreign exchange movements.
“The peso moved sideways on Friday. The markets are quiet and volume is low,” one trader said in a phone interview, as she noted that there was “broad dollar strength” overnight.
DTrading volume fell sharply to $329.5 million from $654.45 million the previous day.
Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, added that investors may simply be staying on the sidelines ahead of key economic data due early next month.
“I am expecting this to be a long wait for investors until the first week of May when GDP (gross domestic product), inflation, and the BSP decision all come out. Although I am for a stay in May, I see players positioning themselves to get the most out of forex,” Mr. Asuncion said via e-mail.
Analysts have been pointing out that the trend weakness of the peso comes amid concerns over domestic inflation and a widening current account deficit, as well as mounting calls for the Bangko Sentral ng Pilipinas (BSP) to tighten rates.
The balance of payments position was at a $266-million deficit in March, improving from a $429-million deficit in February and a $550-million deficit a year earlier. This brought the first-quarter tally to a $1.227 billion deficit, higher than the $1-billion expected by the BSP for the entire year.
BSP Deputy Governor Diwa C. Guinigundo, however, said that trends in the foreign exchange market remain driven by strong demand for dollars to support robust imports as the Philippine economy expands.
“The depreciation of the peso is something one should expect,” Mr. Guinigundo said, pointing out the increased need for capital goods, raw materials and intermediate products.
BSP officials have said that they remain comfortable with the movements in the daily currency trading, though they maintain a presence in the market to smoothen any sharp swings. — Melissa Luz T. Lopez