THE PESO is expected to rebound this week as more businesses reopen amid relaxed quarantine measures in the country.
The local unit closed at P48.62 versus the dollar on Friday, weakening by four centavos from its P48.58 finish on Thursday, data from the Bankers Association of the Philippines showed.
Week on week, the peso also sank from its P48.485-per-dollar finish on Aug. 28.
The peso weakened following Moody’s Investors Service’s downgrade of its outlook for the economy last week, analysts said.
Moody’s said on Thursday it expects gross domestic product to contract by seven percent this year, down from its earlier forecast of a 4.5% contraction. The government sees the economy shrinking by 4.5-6.6% in 2020.
For this week, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said “the peso could again strengthen as more business activities resurface following the easing of COVID-19 (coronavirus disease 2019) lockdown.”
“The peso could be stronger versus the dollar if the economic recovery further gains traction in the coming months as the economy further reopens from lockdowns and exports could start to pick up,” Mr. Ricafort said in an e-mail.
Gyms, establishments offering personal grooming services and tutorial centers were allowed to reopen at the start of the month in areas under general community quarantine.
Mr. Ricafort added that the increase in COVID-19 recoveries will also encourage the labor force to return to work and give a boost to economic activity.
Meanwhile, BDO Unibank, Inc. Chief Market Strategist Jonathan L. Ravelas said the dollar could weaken versus the peso as the greenback had seen stronger demand in recent weeks.
Mr. Ricafort expects the peso to trade between P48.45 and P48.75 versus the dollar this week while Mr. Ravelas forecasts a range of P48.50-P49.70. — KKTJ