THE peso returned to the P56:$1 level on Tuesday and the stock market also rose amid improved sentiment ahead of Thursday’s Bangko Sentral ng Pilipinas policy meeting.
The currency strengthened by 35.6 centavos to P56.96 against the dollar, its strongest close since April 15’s P56.808:$1, while the benchmark Philippine Stock Exchange index (PSEi) added 37.08 points, or 0.56 percent, to 6,650.44.
The broader All Shares index also rose, by 11.46 points or 0.32 percent, to 3,610.00.
The peso opened at P57.25:$1 and ranged from P56.92 to P57.295. Volume surged to P1.797 billion from Monday’s P1.181 billion.
Security Bank Corp. chief economist Robert Dan Roces said a wave of risk-on sentiment had driven the peso and other Asian currencies higher against the US dollar.
The peso’s rally, he added, is due to “technical factors and market dynamics as investors anticipate key economic indicators.” These include US inflation data and the BSP’s decision on Thursday.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said that a decreased likelihood of a policy rate cut, following higher-than-expected inflation, had bolstered the peso.
Philstocks Financial Inc. senior research analyst Japhet Tantiangco, meanwhile, tagged the peso’s gain as having lifted the PSEi.
“Investors’ appreciation of Q2/1H (second quarter and first half) corporate results also helped in bringing the market up,” he added.
Regina Capital Development Corp. Managing Director Luis Limlingan said, “Philippine shares rebounded, tracking the Asian peers, as investors continue to take positions ahead of the upcoming BSP meeting this Thursday.”
“Meanwhile, Wall Street opened the week with choppy trading as investors awaited key inflation reports that could provide direction after last week’s volatility, driven by a weak jobs report and the unwinding of the yen carry trade,” he added.
All but two sector indices closed in the green, with property up the most by 1.69 percent. Mining and oil and financials fell by 1.09 percent and 0.18 percent, respectively.
Decliners outnumbered gainers, 100 to 81, while 64 were unchanged.
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