THE peso weakened against the greenback on Wednesday, reversing its gains from the previous trading day, while investors picked up battered heavyweight stocks following recent losses prompting Philippine shares to recover.
The local currency closed at P63.535 to a dollar, weaker by 6.5 centavos from Tuesday’s closing rate of P63.47. It opened at P63.57 and traded between P63.42 and P63.60.
The dollar traded volume reached $1.324 billion, higher from the previous day’s $1.041 billion.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso slightly weakened amid the expectations of higher inflation rate data, which could breach September’s 7.2 percent.
The Philippine Statistics Authority (PSA) is scheduled to release the inflation data today, Nov. 5.
Ricafort said the “risk of stagflation in view of the risk of super El Niño drought up to early 2027 that may add to inflationary pressures” could weigh on the local currency.
Technical rebound
Meanwhile, easing global oil prices and improved external sentiment supported the local stock market yesterday.
The Philippine Stock Exchange index (PSEi) gained 70.75 points, or 1.26 percent, to close at 5,694.92, recovering from two consecutive sessions of declines and reaching its highest level in nearly a week.
The broader market was mixed, with 94 stocks advancing, 97 declining and 61 unchanged. Trading turnover reached P6.15 billion, net of extraordinary block sales.
Luis Limlingan, head of sales at Regina Capital Development Corp., said the local bourse staged a technical rebound as bargain hunting emerged across select index heavyweights following recent market weakness.
Investor sentiment was also supported by positioning ahead of Thursday’s October inflation report, as market participants await further indications of the country’s inflation trajectory and its possible implications for the Bangko Sentral ng Pilipinas’ monetary policy.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., attributed the market’s recovery partly to lower global crude oil prices, with Brent crude easing to around $103 per barrel, its lowest in more than three weeks.
Oil prices retreated amid renewed signals from the United States and Iran that they were willing to pursue peace talks, with both sides reportedly reviewing proposals from mediators to resolve their differences and avert a wider conflict.
Ricafort also cited improving external financial conditions, including lower US Treasury yields and a weaker US dollar, as factors supporting the local equities market.
The peso likewise remained stronger against the dollar, trading near P63.50, close to its lowest level in about two weeks, according to Ricafort.
Despite Wednesday’s recovery, investors remain focused on the October inflation reading, which could influence expectations for the BSP’s next monetary policy moves.
