The peso closed at its strongest level in more than a week against the greenback, which softened due to weaker-than-forecast consumer sentiment in the US.
The Philippine currency gained 16 centavos to finish at P46.73 to $1 from P46.89 on Friday last week. Monday’s close was the strongest for the peso since it settled at P46.70 on September 2.
“The US dollar pulled back against emerging market currencies on Monday, with consumer sentiment data falling well below forecasts, adding doubts to the Fed rate hike in September,” said Nicholas Antonio Mapa, associate economist at the Bank of the Philippine Islands (BPI).
Preliminary figures from University of Michigan showed consumer sentiment in the US for September plunged to a one-year low of 85.7, much lower than expectations of 91.1 and below August’s final figure of 91.9.
Mapa, however, added a word of caution: “Any strength in the peso may be tempered as the BSP [Bangko Sentral ng Pilipinas] looks to play both sides of the currency pair to limit any excessive strength [as they did during episodes of excessive weakness and]as they look to replenish gross international reserves with the Fed rate hike looming.”
The peso opened at P46.78 to $1 on the Philippine Dealing System (PDS) on Monday, before trading between P46.73 and P46.81.
Total volume transacted on the PDS fell to $507.9 million from $519.6 million in previous trade.