Peso up anew as sales of US durable goods rebound

AFP FILE PHOTO

MANILA, Philippines—The peso inched up against the US dollar on Thursday as reports of an increase in orders for durable goods in the United States rose in May, thereby lifting sentiment for the global economy.

The local currency closed at 42.34 against the US dollar, up by 3 centavos from the previous day’s finish of 42.37:$1.

Intraday high hit 42.20:$1, while intraday low settled at 42.35:$1. Volume of trade amounted to $980.08 million from $721.81 million.

The appreciation of the peso, together with the rise of other Asian currencies against the greenback, came following the release of a report showing that the sale of durable goods, such as cars, computers and machinery, rose by 1.1 percent in May from a month before.

The rise in May reversed the 0.2-percent drop in April and the 3.7-percent decline in March.

Traders said the reported rebound in orders for durable goods, together with earlier reports of increase in US home sales in May, indicated that government efforts to stimulate the US economy might already be gaining ground.

The United States is one of the biggest export markets for products coming from the Philippines and other emerging markets. Favorable economic indicators in the United States, therefore, help lift outlook on the global economy in general and the performance of exporting countries in particular.

Traders said favorable US indicators also boosted the appetite of fund owners for emerging-market assets, such as peso-denominated bonds.