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Peso continues to rise on strong reserve data

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THE PESO continued to strengthen on Thursday on the back of higher dollar reserves and continued risk-on sentiment due to news of the gradual lifting of lockdowns in some parts of the United States.

The local unit finished trading at P50.40 per dollar yesterday, strengthening by 11 centavos from its P50.51 close on Wednesday, according to data from the Bankers Association of the Philippines.

Week on week, it also appreciated by 43 centavos from its P50.84 finish on April 24.

Financial markets are closed today, May 1, for Labor Day.

The peso opened the session at P50.41 per dollar. Its weakest was seen at P50.50 while its strongest was its close of P50.40 against the greenback.

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Dollars traded surged to $906.8 million on Thursday from the $498.5 million logged in Wednesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso’s gains came on the back of the latest gross international reserves data from the central bank.

“The peso exchange rate closed stronger after the country’s GIR (gross international reserves) reached a new record high, thereby providing greater cushion for the peso,” Mr. Ricafort said in a text message.

Preliminary data from the Bangko Sentral ng Pilipinas showed GIR hit a record-high $88.995 billion as of end-March, surpassing the $88.187 billion seen at end-February as well as the $83.613 billion logged a year ago.

Meanwhile, a trader said optimism continued to buoy the peso amid news of the possible easing of lockdowns in some parts of the world.

“The peso’s movement is recently headline driven and there was risk-on sentiment from investors as some authorities state their plans to gradually lift lockdowns because this could help economic recovery,” the trader said in a phone call. — LWTN

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