THE peso regained some ground on Thursday, ending a run of four straight record lows, and the stock market also rebounded slightly ahead of today’s release of August inflation data.
After plunging to P62.565 to the dollar a day earlier, the currency strengthened by four and a half centavos to P62.52:$1. It opened at P62.51:$1 and traded between P62.38 and P62.56 during the session.
Volume declined to $1.552 billion from $1.828 billion.
A trader said the peso was “helped by profit-taking and likely the BSP’s (Bangko Sentral ng Pilipinas) tighter policy stance” but warned that a further decline was possible
“The peso may recover some ground, but until oil and external pressures ease, the bias remains toward weakness rather than sustained strengthening,” the trader said.
The Bangko Sentral ng Pilipinas (BSP), which last week raised key interest rates by another 25 basis points to keep inflation expectations anchored, has said that it was monitoring the foreign exchange market amid the peso’s depreciation.
“The BSP intervenes to address disorderly market conditions and smooth extreme volatility, especially when these can accelerate inflation,” it said.
Philippine shares edged higher as the peso took a breather, with the Philippine Stock Exchange index (PSEi) gaining 16.19 points, or 0.27 percent, to end Thursday at 6,069.42.
Luis Limlingan, head of sales at Regina Capital Development Corp., tagged the peso-dollar gain but added that “the market’s upside was limited by continued uncertainty surrounding the ongoing US-Iran developments.”
AB Capital Securities said the PSEi traded in a tight range as investors awaited the August inflation report. The market consensus was said to be 6.1 percent, slightly lower than July’s 6.2 percent.
The August inflation figure will be the next key test for the market’s 6,000 support level, AB Capital said.
Trading remained light on Thursday with total turnover at P4.26 billion, net of extraordinary block sales.
Market breadth was positive, with 119 gainers against 85 decliners, while 50 stocks were unchanged.
Most sectors advanced, led by the mining and oil sector, which surged by 5.61 percent. The services sector was the only decliner, slipping 0.12 percent.
