THE PESO continued to strengthen against the dollar on Tuesday despite more confirmed cases of the coronavirus disease 2019 (COVID-19) in the country on the back of positive market sentiment due to positive trade data.
The local unit closed at P50.50 per dollar on Tuesday, strengthening by eight centavos from its P50.58 finish on Monday, according to data from the Bankers Association of the Philippines.
The peso opened the session at P50.57 per dollar, which was also its weakest showing for the day. Meanwhile, its strongest intraday level was at P50.47 against the greenback.
Dollars traded went up to $879 million from $771.1 million on Monday.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort attributed the peso’s strength to the January trade deficit data.
“The peso exchange rate strengthened to reach among its strongest in two years, after the narrower trade deficit,” Mr. Ricafort said in a text message.
The positive trade data somehow shielded the peso despite the COVID-19 outbreak, according to UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion.
“The positive trade data help buoy the peso even as external headwinds and the local transmission of the COVID-19 continue to bring in uncertainties in the markets,” Mr. Asuncion said in a text message.
As of press time, confirmed cases of COVID-19 in the country totaled 33.
The country’s trade-in-goods deficit narrowed in January after merchandise export growth outpaced the increase in imports, the government reported yesterday.
Preliminary data released by the Philippine Statistics Authority on Tuesday showed earnings from the country’s merchandise sales abroad increased by 9.7% year on year to $5.79 billion at the start of 2020.
This was a turnaround from the 6.7% drop in January 2019, albeit slower than the 22% growth seen in December 2019.
Meanwhile, the country’s import bill went up by one percent to $9.29 billion in January. This marked a reversal from the 7.6% contraction in December, but was slower than the 3.6% import growth in January last year.
The January result marked the first time since March 2019 that imports grew year on year.
The country’s trade-in-goods deficit for January amounted to $3.5 billion, narrower than the $3.92-billion shortfall recorded in the same month last year.
For today, RCBC’s Mr. Ricafort expects the peso to move within P50.35 to P50.65 against the dollar, while UnionBank’s Mr. Asuncion sees the peso playing around P50.40 to P50.60. — LWTN