Peso slightly dips as investors wait for more signs of global economic recovery

MANILA, Philippines—The peso moved sideways on the first trading day of the week as investments by local firms are seen to grow further and as fund owners looked for more signals to cement hopes that the global economy will post a more significant recovery this year.

The local currency closed at its intraday low of 40.695 against the US dollar, down by 2 centavos from 40.675:$1 on Friday.

Intraday high hit 40.675:$1. Volume of trade was anemic, reaching only $378.2 million from $1.11 billion previously.

Traders said fund owners were trying to weigh various domestic and external factors affecting their risk appetite.

On the domestic front, Moody’s Analytics said manufacturing activity in the country would likely be strong this year on the back of improving growth prospects.

“The Philippines’ industrial production series is volatile, but looking through the noise, it was on a steady uptrend through most of 2012. This reflects solid export sales, strong domestic demand, rising infrastructure spending, and improved foreign investment. Production will continue to grow solidly,” Moody’s Analytics said in a report released on Monday.

On the external front, traders said investors would like to see improvements in the employment situation in the United States.  More jobs in the US will bode well for export earnings of emerging markets like the Philippines.