Peso gains strength on positive reports of US sales, Japan economy

MANILA, Philippines—The peso strengthened in the first trading day of the week as favorable reports on US retail sales and slower-than-anticipated contraction of the Japanese economy lifted Asian currencies.

The local currency closed at 42.42 against the US dollar on Monday, up by 22 centavos from Friday’s finish of 42.64:$1.

Intraday high hit 42.40:$1, while intraday low settled at 42.53:$1. Volume of trade amounted to $723.62 million, down from $1.42 billion previously.

Traders said the appreciation of the peso, which moved together with other currencies in the region, indicated the positive market reaction to the favorable news reports.

The US commerce department reported that retail sales in the world’s biggest economy grew in July from a year ago by a pace that was fastest in four months.

Moreover, Japanese authorities reported that Japan’s economy, dragged by the natural disasters earlier in the year, shrank by 1.3 percent in the second quarter from a year ago. The pace of contraction was slower than the projections of above 2 percent.

Market players said the favorable reports helped regain confidence of foreign fund owners about the prospects of a faster global economic recovery this year, something that would also favor emerging markets like the Philippines that have been dependent on exports to the global economy.