MANILA – The peso continued to improve as it neared its four-year high against the US dollar on Tuesday while the Philippine Stock Exchange index (PSEi) recovered after lawmakers approved the proposed Bayanihan 2 measure.
The local currency finished the day at 48.5 from 48.62 on Monday.
It opened the day’s trade at 48.52, better than its 48.66 start in the previous session, and traded between 48.52 and 48.5, resulting in an average of 48.504.
Volume totaled USD674.6 million, higher than the USD481.8 million on Monday.
“(The) peso continued to strengthen after the House of Representatives approved the Bayanihan 2 Bill, after earlier approved by the Senate, now for signing by President (Rodrigo) Duterte,” Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said.
He said the peso’s close was its highest since Nov. 4, 2016, when the currency closed at 48.48 to the greenback.
Ricafort said the US dollar’s weakness against other major currencies remains because of less demand for the greenback as a safe-haven asset “as US stock markets mostly posted new record highs and global stock markets also most gained amid optimism on positive developments on possible vaccines/treatment for Covid-19 (coronavirus disease 2019) as may also be accelerated by the Trump Administration.”
The decline in Covid-19 cases in some US states, along with the resumption of US-China trade discussions, added to positive market sentiments, he said.
Further increase in the Philippines’ foreign reserves and slower rise of imports also benefited the peso, Ricafort said.
He forecast the peso to trade between 48.40 and 48.55 against the US dollar on Wednesday.
Meanwhile, after a three-day slide, the main equities index rose by 0.17 percent, or 9.86 points, to 5,953.44 points.
All Shares increased by 0.23 percent, or 8.03 points, to 3,548.60 points.
It was a mix among the sectors after Services rose by 1.36 percent, Industrial by 0.42 percent, and Mining and Oil by 0.31 percent.
The Financials counter declined by 0.50 percent and Property by 0.22 percent while Holding Firms was almost unchanged after a drop of 0.01 percent.
Volume totaled 1.25 billion shares amounting to PHP4.6 billion.
Losers led gainers at 109 to 84, while 51 shares were unchanged.
Ricafort said the main index’s close on Tuesday was among its two-week lows “partly weighed by the ghost month recently.”
He, however, said this level is also among the main index’s 5.5-month highs “partly due to the recent progress in the Bayanihan 2 Bill now for signing by the President and the recent gains in US/global stock markets, with US stock markets mostly posting new record highs for the second straight day.”
Ricafort said the next support would be at the 5,800 to 5,900 levels, “which help keep the underlying three-week upward trend since early August 2020 intact.”
“Local interest rates/bond yields among record lows would also help support the search for higher returns in riskier assets/investments, such as equities, especially some bargain-hunting/bottom-fishing on the dips,” he added. (PNA)
