THE PESO is expected to continue climbing this week, with markets anticipating developments on the coronavirus disease 2019 (COVID-19).

The local unit closed trading at P50.40 against the dollar on Thursday, gaining 11 centavos from its P50.51 finish on Wednesday, according to data from the Bankers Association of the Philippines. It also strengthened by 43 centavos from its P50.84 close on April 24.

Markets were closed on May 1 for Labor Day.

The peso’s strength came after the release of latest data on the country’s gross international reserves, according to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC).

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the currency was supported by the country’s economic fundamentals.

“The peso has continued to strengthen because of the Philippines’ financial strength, as generally measured by various macroeconomic indices,” he said via text.

Mr. Asuncion said the peso has shown resilience in the first four months of the year despite the “wild volatility in markets due to the COVID-19 pandemic”.

For this week, Mr. Asuncion said investors will track upcoming data releases.

“Inflation and GDP (gross domestic product) economic data releases will be major drivers this week for the peso,” he said.

The first-quarter GDP report will be released by the Philippine Statistics Authority (PSA) on May 7.

Meanwhile, a BusinessWorld poll of 14 economists yielded a median estimate of two percent for April headline inflation, with analysts citing the continued drop in global oil prices as a major downside risk.

If realized, this would mark the third consecutive month of easing inflation coming from the 2.5% in March and also slower than the 3.1% logged in April 2019. The estimate also falls near the lower end of the central bank’s 1.9% to 2.7% estimate for the month.

BSP Governor Benjamin E. Diokno has said headline inflation may average at two percent this year, down from the 2.2% forecast given in March.

April inflation data will be reported on May 5.

Aside from major economic data releases, RCBC’s Mr. Ricafort said peso trading will also be affected by market sentiment on developments related to COVID-19 and global oil prices.

“The markets would also take cue on future progress on the possible treatment for COVID-19 and also the trend in global oil prices,” Mr. Ricafort said.

On Sunday, Swiss drug maker Roche Holding AG got emergency use approval from the US Food and Drug Administration for an antibody test to help determine if people have ever been infected with the COVID-19, according to Reuters. This is only one among other experiments done among others seeking ways to improve battling with the virus as well as to shield people from having it.

The virus has already sickened more than 3.4 million around the world and killed over 244,000. In the Philippines, cases have risen by 156 to 8,928 as of Saturday with 1,124 recoveries and deaths hitting 603, according to health officials.

For this week, Mr. Ricafort gave a forecast range of P50.25 to P50.65 while Mr. Asuncion sees the local unit moving around the P50.40 to P50.70 band. — L.W.T. Noble with Reuters