THE PESO will likely strengthen further this week as the markets anticipate progress in economic bills in Congress and a reduction in cases of coronavirus disease 2019 (COVID-19).
The peso rebounded to P48.395 against the dollar last Friday, up by 11.5 centavos from its P48.51 finish on Thursday, data from the Bankers Association of the Philippines showed.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso rose ahead of the release of the bond auction results from the Bangko Sentral ng Pilipinas (BSP).
The central bank auctioned off 28-day bills on Friday worth P20 billion, making a full award of the short-term debt papers as the offer was twice oversubscribed.
Meanwhile, a trader said the peso strengthened following the approval by President Rodrigo R. Duterte of the second stimulus package under Bayanihan to Recover as One Act or Bayanihan II.
For this week, Mr. Ricafort expects the peso to rise further as lawmakers advance some economic bills to help boost business activity amid the COVID-19 crisis.
“The major upcoming market leads include any further progress by lawmakers on key reform measures such as CREATE, FIST and GUIDE bills, some moves to further reopen the economy and improve economic recovery prospects,” Mr. Ricafort said in an e-mail over the weekend.
Meanwhile, a trader said in an e-mail that the peso may climb as government agencies deploy funds under the Bayanihan II law, especially to the health sector.
Mr. Ricafort said other factors which could affect peso-dollar trading this week include data on the country’s budget deficit due for release on Sept. 22 and Federal Reserve Chairman Jerome Powell’s semi-annual testimony about the US economy to lawmakers on Sept. 22-23.
For this week, Mr. Ricafort expects the peso to move from P48.25 to P48.60 versus the dollar while the trader sees the local currency ranging from P48.35 to P48.70. — K.K.T. Jose