By Joann Villanueva
MANILA – The Philippine peso ended the week to its nearly three-year high against the US dollar but the main stocks index ended its rally due to correction.
The local unit finished Friday at 49.8 against the greenback, its strongest since the June 15, 2017 close of 49.63, from its 50.00 close a day ago.
It opened the day flat at 49.93 and traded between 49.8 and 50.05.
The average level for the day stood at 49.904.
Volume surged to USD1.01 billion from the USD602.2 million a day ago.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, in a reply to e-mailed questions from PNA, attributed the local currency’s strength to the weaker dollar because of “improved global market risk appetite that led to gains in Emerging Markets such as the Philippines.”
The risk-on sentiments were traced to “some optimism recently about a quicker economic recovery as more countries around the world further re-open their respective economies and Covid-19 new cases and deaths further ease in the US, some European countries and in some Asian countries,” he said.
He said the peso has been appreciating against the US dollar for three consecutive weeks now, with this week’s rise at about 1.6 percent.
“Slight easing of the inflation rate to 2.1 percent in May 2020, the slowest in six months, from 2.2 percent in April 2020, also supported the latest appreciation in the peso exchange rate,” he said.
Ricafort also cited as factors for the generally positive investors’ sentiment in the domestic financial market the proposed stimulus packages aimed at helping the recovery of the domestic economy from the pandemic and the affirmation by S&P of its “BBB+” rating with stable outlook on the Philippines last week.
He forecasts the peso to trade between 49.50-50.00 levels to a dollar next week.
On the other hand, the Philippine Stock Exchange index (PSEi) ended its seven-day rally after it lost 0.80 percent, or 52.36 points, to 6,465.13 points.
All Shares followed with a drop of 0.31 percent, or 11.75 points, to 3,773.28 points.
Most of the sectoral gauges also finished on the red, led by the Services with 1.98 percent decline and was trailed by the Holding Firms, 1.11 percent; Property, 0.82 percent; and Industrial, 0.39 percent.
On the other hand, Mining and Oil rose by 5.52 percent and Financials by 1.50 percent.
Volume totaled to 946.67 million shares amounting to PHP9.11 billion.
Gainers surpassed losers at 118 to 77 while 43 shares were unchanged.
Ricafort dubbed as “healthy down correction” PSEi’s performance during the day, noting that its current level is “still near three-month highs” or since March 11, 2020.
He said the main index rose for the second consecutive week after an increase of 626.29 points or 10.7 percent from last week’s 5.4 percent increase.
“The strong upward trend in the PSEi could still continue provided that it sustains above the 6,200 levels in the coming days/weeks,” he said.
He forecast the next resistance to be at 6,600-level before rising further towards the 7,000-7,500 levels.
He said the main index has increased by a total of 60.1 percent from the low of 4,039.15 last March 19, 2020, but still short of 17.3 percent since the start of 2020 relative to the 7,815.26 points at the end of last year. (PNA)