THE PESO strengthened versus the greenback on Tuesday on the back of positive market sentiment on slower inflation and lower confirmed cases of the coronavirus disease 2019 (COVID-19) in some parts of the world.
The local unit finished trading at P50.68 per dollar on Tuesday, appreciating by four centavos from its P50.72 close on Monday, according to data from the Bankers Association of the Philippines.
The peso opened Tuesday’s session at P50.65 against the dollar. Its weakest showing was at P50.80, while its intraday best was at 50.625 versus the greenback.
Dollars traded went up to $455.9 million from $357.07 million on Monday.
A trader said the peso continued to trade within a range and finished stronger on the back of slower March inflation data.
“It’s (peso) range bound, so I think this will be the trend that will continue silhouetting further developments.
Recently, we know the [Bangko Sentral ng Pilipinas (BSP)] Governor [Benjamin E. Diokno] said there’s more potential easing. Now, [March] inflation is 2.5%,“ the trader said in a phone call.
Headline inflation slowed to 2.5% in March from 2.6% in February on the back of lower oil prices, according to the Philippine Statistics Authority. This is well within the 2-2.8% estimate by the BSP for the month as well as the 2-4% target set for 2020.
This also compares to the 2.3% median estimate in a BusinessWorld poll of 11 economists last week.
Meanwhile, another trader attributed the local unit’s gain to developments suggesting the outbreak has already peaked in some countries.
“The peso appreciated from global optimism after reported cases and deaths in New York and Northern Italy continued to subside, reinforcing market sentiments of stabilization in the global spread of the COVID-19 pandemic,” the second trader said in an e-mail.
Across the world, COVID-19 has already infected more than 1.3 million and has killed over 74,000.
In the Philippines, infections rose to 3,660 as of Monday, with 163 deaths and 73 recoveries recorded.
The first trader expects the peso to trade within the P50.60 to P50.90 band versus the dollar today, while the second trader gave a forecast range of P50.60 to P50.80. — L.W.T. Noble