THE PESO strengthened against the dollar on Tuesday amid mixed US economic data.
The local currency closed at P55.33 versus the greenback on Tuesday, rising by 18 centavos from Monday’s P55.51 finish, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s trading session at P55.35 per dollar. Its intraday best was at P55.10, while its weakest showing was at P55.36 against the greenback.
Dollars traded went down to $1.204 billion on Tuesday from $1.333 billion on Monday.
“The peso appreciated as the greenback’s appeal waned following the weaker-than-expected US durable goods report overnight,” a trader said in an e-mail.
The peso strengthened after better-than-expected US pending home sales and durable goods orders, which could support further rate hikes by the Fed, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The dollar index, which measures the currency against a basket of peers, rose 0.18% to 104.84 in Asia trade and was eyeing a monthly gain of more than 2.5%, its first since September, Reuters reported.
New orders for key US-manufactured capital goods increased by the most in five months in January while shipments of those so-called core goods rebounded, suggesting that business spending on equipment picked up at the start of the first quarter.
Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.8% last month. These core capital goods orders dropped 0.3% in December.
But orders for items ranging from toasters to aircraft that are meant to last three years or more tumbled 4.5% in January, the largest drop since April 2020. These so-called durable goods orders increased 5.1% in December.
Meanwhile, the National Association of Realtors said on Monday its Pending Home Sales Index, based on signed contracts, jumped 8.1% last month, the biggest increase since June 2020. Economists polled by Reuters had forecast contracts, which become sales after a month or two, rising 1%.
For Wednesday, the peso may strengthen further against the dollar amid growing expectations of a hawkish move by the Bangko Sentral ng Pilipinas in its March 23 meeting.
The trader sees the peso moving from P55.20 to P55.45 on Wednesday, while Mr. Ricafort expects it to trade between P55.25 and P55.45 per dollar. — A.M.C. Sy with Reuters