THE PESO strengthened on Wednesday on profit taking and due to positive market sentiment following latest trade data and news of more easing of lockdowns across the world.
The local unit finished trading at P50.46 per dollar yesterday, appreciating by six centavos from the P50.52 close on Wednesday, according to data from the Bankers Association of the Philippines.
The peso opened the session at P50.61 per dollar. Its weakest showing was at P50.64 while its strongest was at P50.455 against the greenback.
Dollars traded slipped to $539.19 million from the $558.66 million logged on Tuesday.
A trader said the peso gained on the back of profit taking and market optimism as some economies gradually restart.
“We saw profit taking among investors. There’s also a risk-on sentiment from the markets as they took in the news of lockdowns gradually being lifted in some parts of the world,” the trader said in a phone call.
Reuters reported that the German federal government and its states approved a draft document to allow all shops and amateur open-air sports to reopen under conditions. They agreed that individual states will decide on the gradual opening of various aspects of public life.
States are also obliged to decide based on infection levels the gradual opening of universities, restaurants, bars, hotels, trade fairs, cosmetic studios, and theatres, among others.
Germany is among other European countries such as Italy, Spain, France that are gradually reopening their economies. In the US states such as Michigan and Texas among others.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the stronger peso came after the release of latest local trade data.
“The peso exchange rate closed stronger after the latest trade data which showed declines in both exports and imports, while trade deficit remains among the narrowest in two years,” Mr. Ricafort said in a text message.
Data from the Philippine Statistics Authority released on Thursday showed the country’s trade deficit amounted to $2.38 billion in March, slimmer than the $3.33-billion deficit seen in the same month last year but wider compared to the $1.66 billion deficit logged in February.
This came as total imports decreased by 26.2% to $6.91 billion from the $9.37 billion seen a year ago. Meanwhile, exports dropped by 24.9% to $4.53 billion from the $6.03 billion in March 2019.
For today, the trader gave a forecast range of P50.40 to P50.70 per dollar while Mr. Ricafort sees the peso playing around the P50.30 to P50.55 levels. — L.W.T. Noble with Reuters