ING sees weaker peso ahead of elections
Amid uncertainty ahead of the elections, the peso may weaken to the 47.5:$1 level and may bounce back only if markets deem the next President as one who can sustain the economic gains made thus far.
During the ING-Economic Journalists Association of the Philippines Forum Tuesday, ING Bank Manila senior economist Joey Cuyegkeng said that historically, elections had been bringing about weakness in currencies due to perception of uncertainty.
The peso Tuesday closed at 46.85:$1, stronger than Monday’s close of 46.965:$1 which was a two-month low. It tested the 47:$1 level, hitting an intraday low of 47.03:$1.
It didn’t help that news carried by foreign media about presidential front-runner Rodrigo Duterte were mostly negative, Cuyegkeng said.
“(Negative) news about Duterte in international media are making some offshore investors anxious and concerned. For them, it’s an unknown,” he said.
In case a presidential candidate deemed to be market-friendly wins the elections, Cuyegkeng said the wait-and-see period would be shorter.
He said presidential bets Mar Roxas and Grace Poe topped a recent mock elections among a group of fund managers.
According to Cuyegkeng, a market rally usually follows a slump during the election period.
