MANILA – The peso closed sideways against the US dollar Tuesday, but the main stocks index slipped partly on a report about the government’s budget deficit last May.
The local currency finished the day at 50.19 from its 50.14 close a day ago.
It opened the trade at 50.1, little changed against its 50.05 start in the previous session. It traded between 50.25 and 50.09, resulting in an average of 50.183.
Volume totaled to USD891.8 million, higher than the USD456.96 million a day ago.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, in a reply to e-mailed questions from PNA, said the peso’s close for the day is “among the weakest in three weeks but still among the strongest in more than two years, vs. yesterday's 50.14, after relative wide budget deficit data.”
The Bureau of the Treasury (BTr) on Tuesday released the May 2020 fiscal report that showed a PHP202.1-billion budget gap for the month, a reversal of the PHP2.6 billion-budget surplus in the same period last year.
It attributed the budget deficit to higher disbursements amid the government’s coronavirus disease (Covid-19) response program.
Ricafort also cited as a factor in Tuesday’s currency trading the rise of oil prices in the international market, which posted a 3.5-month high “as more countries worldwide further reopen their respective economies from lockdown.”
Foreign selling in the local stock market “also partly weighed on the peso exchange rate,” he said.
Ricafort projects the peso to trade between 50.10 to 50.30 levels against the US dollar on Wednesday.
Meanwhile, the Philippine Stock Exchange index (PSEi) slipped by 0.78 percent, or 49.65 points, to 6,297.78 points.
All Shares also contracted and ended the day at 3,685.72 points, down by 0.57 percent, or 21.18 points.
Most of the sectoral gauges also ended on the red, led by the Property counter, which fell 1.43 percent.
Holding Firms declined by 1.15 percent, Industrial by 0.84 percent, and Services by 0.22 percent.
On the other hand, the Mining and Oil counter rose by 2.04 percent and Financials by 1.11 percent.
Volume totaled to 1.31 billion shares amounting to PHP7.3 billion.
Gainers led losers at 103 to 98, while 45 shares were unchanged.
Ricafort said the main index’s current level is “still among three-month highs or since early March 2020 (levels right before the enhanced community quarantine/lockdown in Luzon started in the second half of March 2020).”
“Some confusion on the US-China trade deal partly caused some slight uptick in the US dollar vs. major global currencies, thereby partly weighing on the PSEi and on the peso exchange rate,” he said.
Ricafort, however, said risk-off sentiments and profit-taking remain to be driven by the rise in the number of coronavirus disease 2019 (Covid-19) infections here and abroad.
He forecasts the main index to try the 6,100 to 6,200 levels on Wednesday “which help keep the underlying upward trend intact over the near term.” (PNA)
