Peso hits 3-year high

The peso continued to strengthen against the dollar, gaining 18 centavos yesterday to close at its strongest level in more than three years after the stronger-than-expected US jobs data and positive developments on a potential vaccine against the coronavirus.

The local currency closed at 49.55 to $1 yesterday from Thursday’s 49.73. This was the strongest level for the peso since it closed at 49.505 in June 14, 2017.

Volume increased to $758.3 million yesterday from $615.66 million on Thursday.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said the strengthening of the local currency could be attributed to the positive developments on possible vaccine against the coronavirus disease 2019 or COVID-19 as well as improved global market risk appetite recently.

“The peso is also stronger after new COVID-19 local cases eased to the lowest in about a month,” he added.

Ricafort also cited the continued net foreign buying at the Philippine Stock Exchange (PSE) for the third straight day at $16.8 million yesterday from Thursday’s $15.6 million

The economist said improved collections of the Bureau of Internal Revenue (BIR) and the Bureau of

Customs (BOC) for the month of June also contributed to the peso’s strength.

Ricafort pointed out catalysts and leads for next week include the release of June inflation, the gross international reserves data, trade data for the month of May, and the trend in new COVID-19 cases locally and abroad.

“Markets would also take cue on any further progress on possible vaccines or cure versus COVID-19,” he said.