Peso rises anew as countries release favorable economic reports

MANILA, Philippines—The peso strengthened further on Tuesday as releases of favorable economic indicators for various countries led to a generally optimistic sentiment among international portfolio investors.

The rise of the peso was consistent with the appreciation of other emerging market currencies, which benefited from the moves of investors globally to purchase stocks from various markets.

The local currency closed at 42.385 against the US dollar on the second trading day of the week, up 3.5 centavos from 42.42:$1 on Monday.

Intraday high hit 42.275:$1, while intraday low settled at 42.42:$1. Volume of trade amounted to $1.051 billion, up from $723.62 million previously.

Traders said the appreciation of the peso and other major Asian currencies came amid anticipation of a report that US industrial production improved in July from a month ago, helping regain optimism over the global economy’s ability to accelerate recovery from the latest turmoil.

Moreover, China has allowed the yuan to be more flexible and trade within a wider band against the US dollar, an act that the market favored, traders said.

They also said the market was still reacting positively from the report that the Japanese economy shrank minimally in the second quarter. It contracted by 1.3 percent in the second quarter from a year ago, slower than the consensus projection of over 2 percent.

Traders said the favorable reports helped improve risk appetite of investors, which were prompted to buy more stocks from emerging markets like the Philippines.