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The Philippine peso showcased a robust rebound, touching the 55:$1 mark as the trading week concluded, buoyed by a confluence of factors leading to a weakened US dollar. This financial dynamic emerged against the backdrop of faltering stock prices and the anticipation of subdued jobs data in the United States, casting a shadow over the greenback’s performance.
The local currency’s resurgence was marked by a notable rise to 55.92 per US dollar, a significant improvement from its prior close of 56.12:$1. The peak intra-day performance was observed at P55.89:$1, signaling a strong market sentiment favoring the peso. Domini Velasquez, the chief economist at China Banking Corp., pinpointed the weakening of the dollar to investor apprehensions concerning the US’ regional banks and a downturn in share prices. Moreover, the market’s expectation of weaker jobs data, particularly nonfarm payrolls, further contributed to the dollar’s decline.
This recent performance of the peso mirrors a similar trend observed earlier in the year on January 19, when it neared the 55-level against the US dollar, closing at 55.97:$1. Currently, the peso’s movement is well within the 55 to 58:$1 range, a forecast aligned with the Marcos administration’s projections for the year. These projections hinge on the assumption that imports will rebound, growing at 7 percent in 2024, spurred by a resurgence in infrastructure investments and consequent increased inbound shipments of construction materials.
In response to these market movements, the Bangko Sentral ng Pilipinas is actively formulating a strategy aimed at moderating excessive interventions in the foreign exchange market, striving to maintain a stable and balanced economic environment.
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