MANILA — The peso ended Thursday almost unchanged against the US dollar in line with the risk-off sentiment in the region but the main stocks gauge fell due to profit-taking after recovering the previous day.
The local currency closed the session at 53.09 from 53.08 a day ago, which Land Bank of the Philippines (Landbank) market economist Guian Angelo S. Dumalagan traced to “mixed signals domestically and abroad.”
“Market participants are pricing in a rate hike from the BSP this month, while reacting to hints of possible rate increases by the US Federal Reserve in September and December. The latter factor caused the slight weakness of the peso,” he told PNA in an e-mail message.
The Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) will have its fifth rate setting meet for the year on August 9 and it is widely expected key rates will be hiked after Governor Nestor A. Espenilla Jr. hinted on this a few weeks back.
MB hiked the BSP’s key rates by a total of 50 basis points so far this year as inflation continues to rise, given the upticks of oil prices in the international market and the impact of the tax reform program in the Philippines.
Dumalagan said investors “continue to anticipate another rate hike from the BSP this month.”
Relatively, after its two-day meeting that ended on August 1, 2018, the policy-making Federal Open Market Committee (FOMC) of the Federal Reserve kept key rates steady at between 1.75 to 2 percent after citing continued expansion of the world’s largest economy and its labor market, among others.
Aside from the impact of the Fed decision, Dumalagan said wait-and-see stance on the labor data to be released next week contributed to the sideways movement of the peso during the day.
The currency opened at 52.985 and strengthened to 52.935 mid-trade. It, however, weakened to 53.11 and settled at the average of 53.008 for the day.
Volume reached USD849.2 million, higher than the USD642.13 million Wednesday.
The currency pair is seen to trade between 52.95 and 53.15 Friday.
On the other hand, the Philippine Stock Exchange index (PSEi) gave up 1.004 percent, or 78.67 points, to 7,759.55 points.
A trader pointed this to continued profit-taking after the PSEi’s recent rally.
The broader All Shares declined by 0.75 percent, or 34.84 points, to 4,644.68 points.
All the sectors also finished the day with losses and these were led by Services, which fell 1.23 percent.
It was trailed by Holding Firms, 1.10 percent; Industrial, 0.86 percent; Property, 0.69 percent; Financials, 0.50 percent; and Mining and Oil, 0.22 percent.
Volume reached 1.1 billion shares amounting to Php4.93 billion.
Losers led gainers at 120 to 76 while 46 shares were unchanged. (Joann Villanueva/PNA)
