Peso gains as poll uncertainty fades away

The peso Tuesday gained 20 centavos to close at its intraday high of 46.55:$1, as markets start seeing certainty in a Rodrigo Duterte-led administration.

The peso hit a low of 46.73:$1 after opening at 46.69:$1, which was stronger than Tuesday’s close of 46.75:$1.

The total volume traded slid to $806 million from $824.65 million on Tuesday.

“With some of the uncertainty brought about by the elections slowly fading away, the peso-dollar rate may normalize and consolidate, as focus shifts on external market forces,” Metrobank Research said in a note to clients.

“Oil price movement remains one of the barometers of risk sentiment, together with China and US data, and Fed rate hike expectations. Positioning will also be key as the recent price swings are making players more cautious,” it added.

Metrobank Research expects the peso to stay within the 46.5-47.5:$1 range this week.

For ING Bank Manila senior economist Joey Cuyegkeng, “the peso’s post-election day strength could be sustained with further positive developments from President-elect Duterte.”

“We expect Duterte to form his government in the next few weeks while focusing on key priority areas. Selection of members of his cabinet would be important developments. Discussions about the 2017 budget would start  by end of May or early June. This would help us assess Duterte’s fiscal stance,” Cuyegkeng said. Ben de Vera