Peso retreats to P56 vs dollar to start week

THE stock market bounced back but the Philippine currency went back at the P56 level, losing against the greenback on Monday.

Following four consecutive days of decline, the benchmark Philippine Stock Exchange index (PSEi) added 79.93 points, or 1.23 percent, for a 6,583.47 finish, as developments here and in the US markets boosted sentiment.

The broader All Shares likewise advanced, closing 0.81 percent, or 28.04 points, higher at 3,479.82.

Philstocks Financial Inc. research associate Claire Alviar said the PSEi corrected higher on a technical bounce, adding that positive cues from the US markets last Friday “contributed to lifting the [bourse].”

“Foreigners also [contributed] to the market’s rise, registering a net inflow of P97.19 million, a reversal from a net outflow last week,” she noted.

Luis Limlingan, managing director at Regina Capital Development Corp., said local shares rebounded as “investors returned to buying equities in force following a short-lived market stumble to start the new year.”

Meanwhile, China Bank Capital Corp. Managing Director Juan Paolo Colet said the bourse gained as investors “viewed positively” the Philippine central bank chief’s remarks that a policy rate cut is possible, though not likely, in the first half of 2024.

Colet noted that some investors saw these remarks as “a signal that the Monetary Board was not totally closed to a dovish shift in the next few months.”

Market participation was still weak, with a net market value turnover of P4.09 billion, slightly lower than the month-to-date average of P4.54 billion.

Except for industrial, which dropped by 0.13 percent, all sector indices closed in green territory. The mining and oil index led the gainers with a 1.65 percent increase.

Advancers outnumbered decliners, 94 against 85, while 48 were unchanged.

Meanwhile, the Philippine currency closed at P56.33 against the dollar, down by 36 centavos from P55.97 previously, data from the Bankers Association of the Philippines (BAP) showed.

It opened trading at P55.95:$1 and ranged from P55.95 to P56.33.

The volume reached P1.708 billion, higher than the P1.394 billion recorded in the previous session.

Michael Ricafort, the chief economist at Rizal Commercial Banking Corp., observed that the peso experienced depreciation due to the US dollar holding steady against major global currencies, maintaining 1-month highs.

This stability, Ricafort said, was attributed to the diminished likelihood of Federal Reserve cuts, currently at approximately -1.35 for 2024, and a less than 50-percent chance of a Fed rate cut as early as

March 2024.

Additionally, the benchmark 10-year US Treasury yield reached 1-month highs recently, reaching 4.12 percent, contributing in part to the upward correction of the US dollar against major world currencies.

For Tuesday, Ricafort said that the peso exchange rate could range from P56.25 to P56.45 levels.