Advertisement

Peso strengthens to P49:$1 level on record reserves

Font Size

BW FILE PHOTO

THE PESO climbed to the P49-per-dollar level on Wednesday as market sentiment improved due to data showing record-high dollar reserves as well as positive leads on the US-China trade deal.

The local unit closed at P49.98 per dollar on Wednesday, strengthening by 21 centavos from its P50.19 close on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened the session at P50.11 against the dollar. Its weakest was at P50.13 while its intraday best was at P49.97 versus the greenback.

However, dollars traded dropped to $671.3 million from the $891.8 million seen on Tuesday.

The local unit logged a two-week high on data showing record gross international reserves as of May, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

“The peso closed at its strongest in two weeks after the record high GIR data,” Mr. Ricafort said in a text message.

Data released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday showed the country’s dollar reserves stood at $93.287 billion at end-May, beating the previous record of $90.942 billion as of April and its year-ago level of $85.357 billion. The BSP said the GIR was boosted by inflows from the global bond sale of the Bureau of the Treasury.

Meanwhile, a trader said the peso rose on the back of risk-on sentiment after latest developments in the US-China trade talks.

“The peso appreciated from positive market sentiment after US President [Donald J.] Trump assured that the first phase US-China trade deal remains intact and in effect,” the trader said in an e-mail.

Mr. Trump took to his Twitter account to assure the deal between the world’s two biggest economies remains in effect.

“The China trade deal is fully intact. Hopefully they will continue to live up to the terms of the agreement,” Mr. Trump said in a tweet on Monday.

Reuters reported that White House trade adviser Peter Navarro told Fox News Channel the trade deal between Washington and Beijing was “over,” but backtracked and said he was referring to lack of trust between the US and China due to the virus spread.

For Thursday, Mr. Ricafort gave a forecast range of P49.95 to P50.10 per dollar, while the trader expects the peso to move around the P49.90 to P50.10 band. — LWTN with Reuters





Advertisement