THE PESO may strengthen versus the dollar this week as coronavirus cases in the country continue to decline and ahead of the release of latest data on overseas Filipino workers’ (OFW) remittances and the country’s balance of payments (BoP) position.
The local unit closed at P48.21 against the greenback on Friday, rising from its P48.27 finish on Wednesday, data from the Bankers Association of the Philippines showed. Trading was suspended on Thursday due to Typhoon Ulysses.
Week on week, the peso strengthened by one centavo from its P48.22-per-dollar finish on Nov. 6.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso strengthened last week on news of progress in potential vaccines versus the coronavirus disease 2019 (COVID-19).
Meanwhile, a trader said the peso rose after the US posted a lower-than-expected inflation in October at 1.2% from 1.4% in September.
For this week, Mr. Ricafort said in a text message the local currency may strengthen further against the greenback as the daily tally of coronavirus cases in the Philippines continues to drop below 2,000.
The Health department reported 1,650 new cases on Saturday, bringing the total case tally to 406,337.
Meanwhile, a trader said the downtrend in the case tally will increase demand for peso as more people gain confidence to do business amid the pandemic.
Mr. Ricafort added that other key catalysts for peso-dollar trading this week will include data on remittances to be released Monday and the latest BoP report due to come out on Thursday.
“Going forward, the fourth quarter will usher in the seasonal increase in OFW remittances and conversion to pesos, with the culmination during the Christmas spending season, or a little over a month to go,” Mr. Ricafort said.
For this week, Mr. Ricafort sees the peso moving from P48.05 to P48.35 versus the dollar, while the trader expects it to range from P48.15 to P48.30. — KKTJ