Peso expected to strengthen further in H2By Ronnel W. Domingo
Philippine Daily Inquirer
The peso is expected to strengthen for most of the second semester, swinging from a weak trajectory last month, according to First Metro Investment Corp. and the University of Asia and the Pacific.
In a joint research note, FMIC and UA&P forecast the local currency to trade stronger month after month over the next quarter.
They said the peso is expected to average 41.9 against the greenback in July, 41.72 in August, and 41.52 in September.
FMIC and UA&P attribute this strong stance to favorable conditions in the financial markets and stable gains in remittances from overseas-based Filipinos.
“However, as the year ends, and details of how Spain and Italy will be allowed to grow becomes clearer, while the United States recovers from the second-quarter slowdown with election spending, the dollar may regain attractiveness in the fourth quarter and so temper the peso’s appreciation bias,” they added.
They also said that data on the peso’s 200-day moving average indicates a stable rate, while its 30-day moving points to further appreciation bias.
“[This bias] may become a reality either because of favorable developments in the euro zone or more portfolio capital inflows in expectation of a credit upgrade,” FMIC and UA&P said.
Last month, FMIC and UA&P both opined that the peso would weaken from around P43: $1 to average at P43.453 in July and P43.34 in August.
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