Peso rises with reports of China’s faster-than-expected growth
MANILA, Philippines—The peso inched up on Wednesday, recovering from the previous day’s fall, as investor sentiment for Asia was again lifted by reports that China grew faster than expected in the second quarter.
The local currency closed at 43.05 against the US dollar, up by 18 centavos from the previous day’s finish of 43.23:$1.
Intraday high hit 43:$1, while intraday low settled at 43.19:$1. Volume of trade inched up to $1.258 billion from $1.13 billion previously.
The appreciation of the peso, together with other regional currencies, came after the release of the government report showing that China’s gross domestic product grew by 9.5 percent in the second quarter from a year ago.
The figure was slower than the 9.7 percent registered in the first quarter, but was nonetheless faster than most projections.
Traders said the still robust growth of China, a major export market for neighboring countries, signaled that Asia would continue to grow much stronger than its Western counterparts, and so investors were prompted to buy securities from emerging Asian economies like the Philippines.
They also said the appreciation of the peso on Wednesday came amid speculations that interest rates in the region would rise some more, with the central banks of Thailand and Malaysia expected to hike policy rates again.
Higher policy rates influence an increase in yields of portfolio instruments as well, thereby boosting appetite of investors, traders said.
