Peso strengthens on positive news
The peso strengthened Wednesday as it tracked the movement of other Asian currencies.
The peso closed at 43.43 to a dollar, stronger than the 43.46 closing reported the day before.
The peso started strongly, opening at 43.30:$1. It was at its weakest at 43.45, which was still stronger than Tuesday’s close.
Trading volume was thinner at $969.4 million against $1.1 billion the previous day.
Asian markets rallied Wednesday as sentiment turned positive on hopes of a stronger recovery of the US economy.
In China, monetary authorities also provided cash to some financial institutions to curb fears of a possible cash crunch in Asia’s biggest economy.
The People’s Bank of China earlier this week said it would discourage loan growth on the mainland to curb risky lending by Chinese banks, raising growth concerns among investors.
The peso climbed on news that imports to the Philippines grew 7.4 percent year on year last April, the first monthly increase recorded this year.
Higher import levels signaled a recovery in the country’s export sector, which dropped 12.8 percent in the first quarter of 2013. A significant portion of the country’s exports is made up of finished products assembled from imported components.
Jonathan Ravelas, chief market strategist at BDO, earlier this week said market players should look beyond the US Federal Reserve’s statements on the end to easy money policies, which originally sparked the selloff in Asian markets.
“This is actually good news for the United States as it highlights that the US recovery is gaining traction. A recovering US economy should be good for the global economy,” he said.
The United States is the Philippines’ biggest trading partner. The Philippines also receives more investments from the US than any other country in the world.—Paolo G. Montecillo