MANILA – Both the peso and the main stocks gauge closed to new highs on Friday as investors cheered positive reports on a possible coronavirus disease 2019 (Covid-19) vaccine.

The local currency finished the day’s trade at 49.55 to the US dollar from its 49.73 close on Thursday after opening at 49.70 and trading between 49.70 and 49.55. The day’s average stood at 49.631.

Volume totaled USD758.3 million, higher than the previous day’s USD615.66 million.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the local currency posted its strongest level on Friday after more than three years, when trade ended at 49.505 on June 14, 2017.

Ricafort attributed this performance to the stronger-than-expected US jobs report for June that showed an 11.1-percent drop in unemployment rate after 4.8 million jobs were recorded.

Another plus factor for the peso was the news about the positive development on the possible Covid-19 vaccine, he said.

“(These factors) led to improved global market risk appetite recently, leading to gains in US/global stock markets and reducing the demand for safe havens, such as the US dollar, especially vs. Emerging Market currencies, such as the peso,” Ricafort said in a reply to e-mailed questions from the Philippine News Agency (PNA).

On the local front, the government’s report about the improved collections of both the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) last June, along with the health department’s report about lower Covid-19 infections as of Thursday also buoyed the peso, he added.

Ricafort further said the local currency has strengthened by 2.1 percent or about PHP1.09 against the greenback, although the exchange rate eased for the sixth week in the past seven weeks by negative PHP0.37 or negative 0.7 percent.

“Major support for the US dollar/peso exchange rate over the past four years at 49.20 levels, which serves as an important gateway prior to further peso appreciation in the coming weeks/months,” he said.

Meanwhile, the Philippine Stock Exchange index (PSEi) gained anew for the fourth consecutive day and rose 0.14 percent, or 8.58 points, to 6,372.66 points.

All Shares increased by 0.03 percent, or 0.95 points, to 3,717.93 points.

Most of the sectoral gauges also finished the week up, led by Mining and Oil, which increased by 2.21 percent.

The Property counter posted an uptick of 0.82 percent, Holding Firms by 0.41 percent, and Services by 0.05 percent.

On the other hand, Financials fell by 0.74 percent and Industrial by 0.57 percent.

Volume totaled 2.66 billion shares amounting to PHP7.39 billion.

Losers led gainers at 92 to 103, while 45 shares were unchanged.

Ricafort said the main equities index posted its new two-week high since June 19, when it finished the day at 6,315.07 points.

He said PSEi’s finish this week is also near its four-month high since March 11, when it ended the trade at 6,353.26 points.

Ricafort said the main index rose by 180.82 points or 2.9 percent this week after a drop in the past two weeks.

“The recent easing in local interest rate benchmarks after the surprise 0.50 basis points BSP (Bangko Sentral ng Pilipinas) rate cut also supported sentiment on the local stock market as this could further lower borrowing costs/financing costs for business/listed companies and help increase their net income and overall valuations,” he said.

The main index has declined by 1.442.60 points or 18.5 percent since the start of the year after its 7,815.26 points close by end-2019, he added.

Ricafort forecast the resistance level next week to be at the 6,380-level while support level is seen at 6.000 to 6,200 points.

Among the factors for next week’s trading are the domestic inflation report for June, the gross international reserve report for May, and the trade report for May.

“Markets would also take cue on any further progress on possible vaccine/cure vs. Covid-19 that recently supported sentiment and the recent gains,” he added. (PNA)