The peso appreciated to a 45-month high against the US dollar on Monday and is poised to breach the 48-per-greenback boundary in the coming days.
The local currency closed at 49.01 a dollar Monday, up from 49.041 Friday. It was the peso’ strongest closing since it settled at 48.95 on Nov. 11, 2016. Total volume traded reached $409.3 million Monday, lower than $647.4 million on Friday.
ING Bank Manila senior economist Nicholas Mapa said the US dollar “staged a bit of a rally on the back of last Friday’s jobs report and planned stimulus efforts with President Trump signing an extension to the paycheck protection plan.”
“The bounce in US dollar could slow the peso’s recent appreciation spell, however the absence of any meaningful demand for foreign currency given the stark drop off in economic activity could translate to a peso strength until import demand resurfaces,” Mapa said in an emailed response to Manila Standard.
Astro del Castillo, managing director of First Grade Finance Inc., a finance and investment company, earlier said there was a continued loss of appetite for the greenback because of the unresolved rift between the US and China.
Mapa earlier said the peso might continue to enjoy the strengthening bias as the greenback remained relatively weak given the global central bank easing.
He said the Bangko Sentral ng Pilipinas would continue to make its presence felt in the spot market, although a breach of the 49 level might happen if import demand continued to fall rapidly and remittances bounced back to expansion.
Data from the Philippine Statistics Authority showed that imports fell 24.5 percent in June to $6.6 billion while exports dropped 13.3 percent to $5.3 billion.
Cash remittances declined by 16.2 percent in April to $2.046 billion from a year ago.
The Department of Finance said the peso remained one of the most stable Asian currencies despite the rising risks heightened by the onslaught of the COVID-19 pandemic.
Finance Undersecretary and chief economist Gil Beltran said that as of July 8, the peso ranked first among four Asian currencies that maintained their value against the US dollar.