Peso rises to new three-month high on GDP data

The peso appreciated to a new three-month high against the dollar on Thursday following stronger-than-expected gross domestic product (GDP) growth last quarter.

The local unit closed at PHP 55.89 per dollar on Thursday, strengthening by 15.5 centavos from its PHP 56.045 finish on Wednesday, based on Bankers Association of the Philippines data.

This was its best close in more than three months or since its PHP 55.74-a-dollar finish on Aug. 4.

The peso opened Thursday’s session stronger at PHP 55.92 against the dollar. Its intraday best was at PHP 55.84, while its weakest showing was at just PHP 55.98 versus the greenback.

Dollars exchanged went up to USD 1.33 billion on Thursday from USD 1.24 billion on Wednesday.

The peso gained against the dollar following the release of data showing that Philippine economic growth picked up in the third quarter, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message

“The peso strengthened after the Philippine economy grew by 5.9% annually in the third quarter, which was higher than market expectations,” a trader likewise said in an e-mail.

GDP growth in the third quarter was faster than the 4.3% expansion seen in the preceding three-month period. This also exceeded the 4.9% median estimate of 19 economists in a BusinessWorld poll.

However, third-quarter growth was slower than the 7.7% expansion in the same period last year.

For the first nine months, GDP growth averaged 5.5%, still below the government’s 6-7% full-year target.

The peso was also supported by the continued decline in global crude oil prices, Mr. Ricafort added.

For Friday, the trader said the peso could “appreciate further ahead of a likely downbeat US initial jobless claims report.”

The trader sees the peso moving between PHP 55.75 and PHP 56 per dollar on Friday, while Mr. Ricafort expects it to range from PHP 55.80 to PHP 56. — AMCS