THE PESO strengthened further against the dollar on Thursday on news of localized quarantine protocols and amid the ongoing dispute between the US and China.
The local currency ended stronger at P50.61 against the greenback yesterday, inching up by four centavos from P50.65-a-dollar close on Wednesday, based on data from the Bankers Association of the Philippines.
The peso opened at P50.59 per dollar yesterday, weakening to as low as P50.63 and rising to as high as P50.63 versus the greenback.
Dollars traded dropped to $778.6 million on Wednesday from $919.2 million the day prior.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso ended at its “strongest” pace in a week largely due to countries starting to gradually reopen their economies following strict lockdown measures, which could mean a pickup in activity soon.
“Peso also stronger on government plans to reduce lockdowns to the barangay level, thereby could help pick up business/economic activities and investment valuations,” Mr. Ricafort added via mobile phone message.
Carlito G. Galvez. Jr., chief enforcer of the government’s anti-coronavirus pandemic efforts, said on Tuesday they are eyeing localized quarantines where coronavirus disease 2019 (COVID-19) hot spots will be locked down at barangay level “to preserve the economy.”
This, after Metro Manila, along with other parts of the country, were placed under strict lockdown for around 10 weeks before transitioning to a modified enhanced community quarantine on May 16 where more businesses are allowed to operate but with public transportation still banned.
Meanwhile, some countries overseas started easing their quarantine protocols this month including the US, Italy, France, and Spain, among others.
For UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion, the peso inched up yesterday as the market reacted to “deteriorating US-China relations” after the US increased restrictions for Huawei.
“Expect the peso on a downtrend amidst the growing diplomatic spat,” Mr. Asuncion said.
A trader attributed the stronger finish to platers taking profits on expectations of “better US economic data” set to be released Thursday evening.
The trader added that “the local currency might sustain its strength from possible some dollar unloading ahead of the long weekend.”
For today, Mr. Asuncion sees the peso settling within the P50.60-50.80 range, the trader said it could fall within P50.55-50.75, while Mr. Ricafort expects it to be between P50.45 and P50.70 per dollar. — B.M. Laforga