Peso ends unchanged vs dollar amid mixed sentiment

THE PESO was unchanged against the dollar on Wednesday after the greenback steadied and amid mixed investor sentiment.

The local currency closed at PHP 54.45 versus the dollar on Wednesday, steady from Tuesday’s finish, data from the Bankers Association of the Philippines’ website showed.

The peso opened Wednesday’s session steady at PHP 54.45 per dollar. Its intraday best was at PHP 54.35, while its worst showing for the day stood at PHP 54.52 versus the greenback.

Dollars traded fell to USD 1.112 billion on Wednesday from the USD 1.639 billion recorded on Tuesday.

“The peso was unchanged due to mixed signals amid investor optimism from easing concerns on the global banking sector and lingering recession risks,” a trader said in an e-mail.

First Citizens BancShares, Inc. agreed to buy all of failed lender Silicon Valley Bank’s deposits and loans on Monday.

The peso’s movement on Wednesday reflected the dollar’s, which steadied after recent declines, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The dollar edged up against most major peers on Wednesday, steadying after recent declines, and gaining sharply against the yen which was volatile as the end of the Japanese fiscal year approaches, Reuters reported.

The dollar index, which tracks the currency against six peers, gained 0.15% to 102.64. It has fallen for the past two sessions, and is set for a 2.1% monthly fall, a victim of the market ructions induced by problems in the banking industry.

The yen remained volatile in the run-up to the end of the Japanese fiscal year on Friday. The dollar touched a one-week high and was last up 0.8% to 131.99 yen, while the euro gained 0.6% against the yen to 142.9.

The dollar had dropped 0.5% against the yen the previous day, when it uncharacteristically moved in the opposite direction to long-term US Treasury yields, which have been rising as calm returns to markets.

Mr. Ricafort added that mixed US economic data also affected peso-dollar trading.

US consumer confidence unexpectedly increased in March despite recent financial market turmoil that sparked the collapse of two regional banks, but Americans continued to expect inflation to remain elevated over the next year.

The Conference Board’s consumer confidence index rose to 104.2 this month from a reading of 103.4 in February. The cutoff date for the survey was March 20, 10 days after California-based Silicon Valley Bank collapsed. New York-based Signature Bank failed on March 12.

Economists polled by Reuters had forecast the index would be at 101.0. The rise in confidence contrasted with a deterioration in sentiment reported earlier this month by the University of Michigan. It was driven by consumers under the age of 55 and households with annual income of USD 50,000 and more.

The survey places more emphasis on the labor market. The share of consumers viewing jobs as “plentiful” fell, while the proportion saying jobs were “not so plentiful” rose. But the share of those saying jobs were “hard to get” dipped to the lowest level since April 2022.

The survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, fell to a still-high 38.8 from 40.7 in February, remaining consistent with a tight labor market.

For Thursday, the trader said the peso may strengthen on the back of month-end dollar flows.

The trader and Mr. Ricafort expect the peso to move between PHP 54.35 and PHP 54.55 against the dollar on Thursday. — A.M.C. Sy with Reuters