Peso strengthens further on continued inflows
THE PESO strengthened further on Monday because of the weakening of the US dollar and a continued increase in foreign exchange inflows.
The local currency ended at P55.41 against the greenback, up by 15 centavos from Friday’s P55.56 close, data from the Bankers Association of the Philippines’ website showed.
The peso opened Monday’s session at P55.50 per dollar, which is also its weakest showing for the day. Its intraday best was at P55.40 versus the greenback. Dollars traded dipped further to $627.25 million from $902.27 million on Friday.
A trader said in a Viber message that the strengthening of the peso is largely due to a weaker dollar against most Asian currencies as well as remittances from overseas Filipinos.
The US dollar index slipped 0.19% to 104.61, according to a report by Reuters.
Meanwhile, the Japanese yen was 0.4% stronger at ¥136.19 per dollar, after jumping more than 0.5% to a high of ¥135.78 earlier in the session.
The yen climbed on Monday on news that the Japanese government could soon revise a joint statement with the Bank of Japan over the latter’s inflation target, potentially paving the way for a tweak in its ultra-loose monetary policy, Reuters said.
The peso also strengthened on Friday on the back of seasonal dollar inflows as the holidays draw near, the trader said.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that aside from the continuing effect of remittances and the weaker dollar, the peso was also affected by global crude oil prices.
Oil prices rose on Monday as China, the world’s top crude oil importer and No. 2 oil consumer, abruptly ended its “dynamic zero-COVID” policy.
The US also bought back oil for its state reserves, which supported the rise in oil prices, as the US Energy department said on Friday that it would begin repurchasing crude oil for the strategic petroleum reserve for delivery in February next year.
A report by Reuters showed that Brent crude futures gained 42 cents, or 0.5%, to $79.46 a barrel while US West Texas Intermediate crude was at $74.67, up 38 cents, or 0.5%.
For the next day’s movement, the trader expects the peso to move sideways with a downward bias at P55.25 to P55.50 per dollar, again due to the seasonal inflows but may be tempered by the weak performance of the Philippine Stock Exchange following news on PLDT, Inc.
Telecommunications provider PLDT led by Manuel V. Pangilinan is reorganizing its management after discovering a P48-billion budget overrun, representing 12.7% of its P379-billion capital expenditure over the past four years, the company announced on Friday.
PLDT’s stock plunged more than 19% to P1,192, with almost P62 billion in market value wiped out. This was the company’s steepest loss ever based on prices going back to January 1990 as investors dumped the shares.
Meanwhile, Mr. Ricafort expects the peso to move between P55.30-P55.50 per dollar. — Aaron Michael C. Sy
