THE PESO was unchanged versus the greenback on Tuesday as the market stayed on the sidelines ahead of the release of the second-quarter gross domestic product (GDP) data.
The local unit closed at P49.095 per dollar yesterday, unchanged from its Monday finish, data from the Bankers Association of the Philippines showed.
The peso opened the session slightly weaker at P49.12 per dollar. Its weakest showing was at P49.14 while its strongest was its close of P49.095 against the greenback. Dollars traded slipped to $470.35 million on Tuesday from the $568.65 million recorded on Monday.
Investors were on the sidelines days ahead of major economic data release, a trader said.
“The market is just waiting for the Q2 GDP data release,” the trader said in a phone call.
A BusinessWorld poll of 17 economists yielded a median estimate of an 11% contraction in the country’s second-quarter GDP, worse than the 0.2% contraction in the January to March period and a reversal of the 5.4% growth last year.
Analysts expect a broad-based weakness in various components of the economy including consumption, construction and exports, among others, due to the lockdown during the period.
The Philippine Statistics Authority will release second-quarter GDP data on Aug. 6.
The peso held on to a relatively strong close on positive sentiment after better US economic data, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
“Global market risk appetite was supported by stronger US manufacturing data which is the fastest in more than a year,” Mr. Ricafort said in a text message.
US manufacturing activity accelerated to its highest level in nearly 1-1/2 years in July as orders increased despite a resurgence in new COVID-19 infections, which is raising fears about the sustainability of a budding economic recovery, Reuters reported.
Still, the road to recovery for manufacturing likely remains long and bumpy, with the survey from the Institute for Supply Management (ISM) on Monday also showing hiring at factories remaining subdued for a year now. About 72% of industries reported growth last month.
The ISM said its index of national factory activity raced to a reading of 54.2 last month from 52.6 in June. That was the strongest since March 2019 and marked two straight months of expansion. A reading above 50 indicates growth in manufacturing, which accounts for 11% of the US economy.
The trader expects the peso to move around the P49 to P49.30 levels versus the dollar this Wednesday while Mr. Ricafort gave a forecast range of P49.05 to P49.20. — L.W.T. Noble with Reuters