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Peso Strengthens: Latest Philippine Currency Update
Peso's Resilience Against the Dollar
The Philippine peso displayed remarkable strength at the beginning of November, touching the 55 level during Friday's trading. Simultaneously, local shares saw a positive trend. Peso's Surge The peso saw a notable increase of 0.63 against the US dollar, closing the day at 56.1, a substantial improvement from Tuesday's closing rate of 56.73.
Intraday Fluctuations
The day opened with a stronger peso at 56.60 compared to the previous trading's starting point at 56.80 against the greenback. The local currency exhibited a fluctuation from 55.93 to 56.60 during the day, resulting in an average level of 56.25. Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort pointed out that the intraday trading at 55.93 marked a new low in nearly three months, dating back to August 7, 2023. Ricafort attributed the stronger peso to "seasonal increases in OFW remittances to finance holiday-related spending, especially during this extended holiday weekend" and "the recent decline in global crude oil prices, hitting a three-month low, which could reduce the country's oil import bill and narrow the trade deficit." Surge in Trade Volume Trade volume surged to USD1.84 billion, significantly surpassing Tuesday's volume of USD860.9 million. "For Monday, the peso exchange rate is expected to range between 56 to 56.20 levels," added Ricafort.
Positive Momentum in the Stock Market
Simultaneously, the Philippine Stock Exchange index (PSEi) experienced gains over the two trading days of the week. PSEi's Gains On Friday, PSEi advanced by 15.49 points, although it fell short of the 6,000 mark, closing the day at the level of 5,989.27. All Shares also registered an increase of 8.88 points, reaching 3,263.05. Most sectoral indices ended positively, except for Financials, which declined by 8.20 points. Advancers outnumbered decliners at 106 to 59, with 49 remaining unchanged.
The Philippine Peso's Recent Trends
Factors Contributing to Peso Depreciation The Philippine peso has seen a weakening trend against the US dollar since Ferdinand Marcos Jr. assumed the presidency in June 2022. The Bangko Sentral ng Pilipinas (BSP) reported an average peso-dollar exchange rate of 52.239 in June 2022, which increased to 55.728 in May 2023. This reflects a depreciation of approximately 7% in the peso's value against the dollar since Marcos's inauguration.
Factors Behind Peso Depreciation
Several factors have contributed to the peso's depreciation. One significant factor is the global economic slowdown, which has led to reduced demand for Philippine exports. Additionally, rising interest rates in the United States have made the dollar more appealing to investors.
BSP's Measures
In response to the peso's decline, the BSP has taken various measures to support the local currency, including raising interest rates and intervening in the foreign exchange market. However, the effectiveness of these measures has been limited thus far.
Peso-Dollar Exchange Rate Trends
Exchange Rate Fluctuations The peso-dollar exchange rate has shown fluctuations over time, reflecting the evolving economic landscape. Here are some key data points: - June 2022: 52.239 - July 2022: 53.306 - August 2022: 54.406 - September 2022: 55.498 - October 2022: 56.595 - November 2022: 57.689 - December 2022: 58.787 - January 2023: 59.889 - February 2023: 60.996 - March 2023: 62.109 - April 2023: 63.222 - May 2023: 55.316 It is essential to note that the peso-dollar exchange rate constantly fluctuates, making future predictions challenging. Nevertheless, the current trend suggests that the peso is likely to continue weakening against the dollar in the near term. Sources: THX News & Philippine News Agency. Read the full article
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