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Peso may climb further

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THE PESO may strengthen further versus the dollar this week ahead of the release of data on manufacturing, inflation and unemployment.

The peso closed at P48.06 against the dollar on Friday, rising by 5.5 centavos from its P48.115 finish on Thursday, data from the Bankers Association of the Philippines showed.

Week on week, the peso strengthened by 17 centavos from its P48.23 finish on Nov. 20.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso strengthened against the dollar after the central bank released the October balance of payments (BoP) report.

The Bangko Sentral ng Pilipinas reported on Thursday that the country posted a BoP surplus of $3.44 billion last month, up from the $163 million in the same month last year.

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This was the biggest monthly surplus since the $3.95 billion recorded in November 2010.

A trader added the demand for the peso increased as the country saw growth in exports amid the pandemic.

For this week, Mr. Ricafort said the local currency may rise as the economy reopens further, which could drive growth in the manufacturing sector.

He said other major catalysts include data on inflation and unemployment rate set to be released on Dec. 4.

A trader meanwhile said further progress on coronavirus vaccine candidates will boost the peso this week.

Inflation likely settled between 2.4% and 3.2% in November on higher oil prices and crop damage caused by typhoons, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Friday.

Inflation quickened to 2.5% in October from 2.3% in September, the fastest pace in three months. The uptick was mainly due to faster increases in prices of food and nonalcoholic beverages, as well as in education, restaurant and miscellaneous goods and services.

Year to date, inflation averaged at 2.5%, within the BSP’s 2-4% target. The central bank expects inflation to average at 2.4% this year.

For this week, Mr. Ricafort sees the peso moving from P47.90 to P48.15 versus the dollar, while the trader expects a range of P47.90 to P48.10.

Credit belongs to : https://www.bworldonline.com/



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