THE PESO slipped against the dollar on Tuesday amid reduced flows after the holidays and mixed economic data.
The local currency closed at PHP 55.79 versus the greenback on Tuesday, inching down by 3.5 centavos from Dec. 29’s close of PHP 55.755, data from the Bankers Association of the Philippines showed.
The peso opened Tuesday’s trading session at PHP 55.70 per dollar. Its weakest showing was at PHP 55.91, while its intraday best was at PHP 55.60 against the greenback.
Dollars traded rose to USD 853.65 million from USD 807.8 million on Dec. 29.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the peso declined against the dollar on Tuesday “after the seasonal increase in holiday-related spending partly funded by conversion of OFW (overseas Filipino worker) remittances to pesos [was] already done and over with upon crossing the new year.”
Mr. Ricafort said data on the National Government’s (NG) debt and manufacturing activity also affected peso-dollar trading on Tuesday.
NG outstanding debt inched up by 0.02% month on month to PHP 13.644 trillion at end-November. Year on year, the debt stock increased 14.35% from PHP 11.93 trillion.
Meanwhile, the S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) inched up to 53.1 in December from 52.7 in November, reflecting a “solid expansion in production levels.”
The peso also weakened after global oil prices rose on Tuesday, Mr. Ricafort said.
Brent crude futures recovered from their early weakness, when prices fell by USD 1 a barrel, rebounding to USD 86.29 a barrel by 0737 GMT, an increase of 38 cents or 0.44%, Reuters reported. US West Texas Intermediate crude was at USD 80.77 a barrel, up by 51 cents or 0.64%
Meanwhile, a trader said the peso slipped due to China’s improving coronavirus situation, which could improve global demand and drive oil prices higher.
The trader said the peso could rebound against the dollar on Wednesday on expectations of a weaker US manufacturing PMI report.
The trader gave a forecast range of PHP 55.65 to PHP 55.90 for Wednesday, while Mr. Ricafort sees the peso moving from PHP 55.70 to PHP 56.90 per dollar. — AMCS with Reuters
This article originally appeared on bworldonline.com