Peso likely to weaken
THE PESO could depreciate versus the dollar this week on expectations of a wider trade deficit and weaker second quarter gross domestic product (GDP) growth.
The local unit closed at P55.20 per dollar on Friday, gaining 40 centavos from its P55.60 finish on Thursday, based on Bankers Association of the Philippines data.
However, the peso weakened by seven centavos from its P55.13 finish a week earlier.
The local currency opened Friday’s session at P55.48 against the dollar. Its weakest showing was at P55.50, while its intraday best was at P55.15 versus the greenback.
Dollars exchanged increased to $1.22 billion on Friday from $986.6 million on Thursday.
The peso appreciated versus the dollar after a sharp decline in global oil prices, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the gradual downtrend in oil prices could reduce inflation pressures.
For this week, Mr. Asuncion said the market will factor in trade balance and GDP data to be released on Tuesday.
The peso may also be weighed down by expectations of a weaker second quarter GDP growth report, he added.
A BusinessWorld poll of 18 analysts last week yielded a median GDP growth estimate of 7.5% for the April-June period, lower than the 8.3% seen in the first quarter and the 12.1% logged in the same period a year ago.
For this week, Mr. Asuncion gave a forecast range of P55.55 to P56.10 per dollar, while Mr. Ricafort expects the local unit to move within a stronger P54.80 to P55.30 range. — K.B. Ta-asan