Finance

Peso inches up against the dollar despite fears of stricter lockdowns


THE PESO climbed against the dollar on Wednesday despite fears of stricter lockdowns following a rise in cases of the highly contagious Delta variant of the coronavirus disease 2019 (COVID-19).

The local currency closed P50.37 per dollar on Wednesday, rising by five centavos from its P50.42 finish on Tuesday, based on data from the Bankers Association of the Philippines’ website.

The peso opened sharply weaker at P50.40 against the dollar and declined to as low as P50.43, while its intraday best was at P50.35 versus the greenback.

Dollars traded dropped to $686.5 million on Wednesday from $842.13 million on Tuesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso climbed slightly despite a proposal to tighten restriction measures anew to prevent the Delta variant from spreading further, which could affect the economy’s recovery prospects.

“Going forward, risk of lockdowns could reduce economic activities and imports, as seen since the pandemic started last year,” Mr. Ricafort said in a Viber message.

OCTA Research proposed that Metro Manila and nearby areas be placed under stricter lockdowns again as early as Aug. 1 amid rising cases of the Delta variant in the country. The group of public health researchers warned that the number of new COVID-19 infections could rise to 5,000 daily towards the end of August if lockdowns are not imposed.

The Health department reported 4,478 new COVID-19 cases on Wednesday, which brought active cases to 54,552. As of July 24, there were 119 cases of the Delta variant in the country.

Meanwhile, a trader said the weaker-than-expected US durable goods report for June also affected peso-dollar trading.

For Thursday, the local currency may retreat anew “amid hawkish expectations from the US Federal Reserve policy meeting overnight.”

Markets are waiting to see whether the Fed will provide any clues on the timing of tapering later in the day amid surging US inflation, Reuters reported.

Both Mr. Ricafort and the trader expect the peso to range from P50.25 to P50.40 versus the dollar on Thursday. — with Reuters

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