THE PESO may strengthen this week as the market monitors the US presidential election and local trade and inflation data.
The local unit closed at P48.40 versus the dollar last Friday, inching down by one centavo from the previous day, data from the Bankers Association of the Philippines showed.
Week on week, the peso strengthened by eight centavos from its P48.48-per-dollar finish on Oct. 23.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the slight decline of the peso to the surge in cases of the coronavirus disease 2019 (COVID-19) in the United States.
Meanwhile, a trader said the local currency weakened after the US government reported a seven-month low in the number of claims for jobless benefits.
Mr. Ricafort said the peso may rise this week as the market waits for the results of the US presidential election.
“A major lead is less uncertainties in the US presidential elections that will help improve economic recovery prospects and global market risk appetite,” he said in a text message.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said peso’s rise may be tempered by market preference for stable investment instruments.
“Lacking corporate forex demand during the first week of the new month could mitigate upside peso pressures triggered by a backdrop of sustained global risk off,” he said in an email.
Mr. Asuncion said there continues to be demand for the local currency amid an improved outlook for the economy.
“Local data releases will likely show benign inflation in October and curtailed trade deficit due to lackluster imports with downside bias until there’s clarity on the US election outcome,” Mr. Asuncion said.
For this week, Mr. Ricafort sees the peso moving from P48.30 to P48.50 versus the dollar, while Mr. Asuncion expects it to range from P48.30 to P48.60. — KKTJ