PSEi up on Fed statements; peso weakens anew to 59 vs. US dollar

PSEi up on Fed statements; peso weakens anew to 59 vs. US dollar

MANILA – The main equities index ended Monday higher amidst hawkish statements from Federal Reserve presidents but the peso weakened anew to its lowest level against the US dollar.

The Philippine Stock Exchange index (PSEi) rose by 1.11 percent, or 65.58 points, to 5,970.33 points.

All Shares followed with a jump of 0.66 percent, or 20.89 points, to 3,198.63 points.

Most of the sectoral indices also gained during the day, namely Holding Firms, 2.27 percent; Property, 2.26 percent; Mining and Oil, 1.33 percent; Services, 0.65 percent.

On the other hand, Financials fell by 1.19 percent and Industrial by 0.09 percent.

Volume was thin at 541.89 million shares amounting to PHP6.64 billion.

Advancers led decliners at 87 to 76 while 49 shares were unchanged.

Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales, said gains in the local bourse transpired even as investors are bracing for a week that is full of data releases and several speeches among Federal Reserve officials.

Among the economic data releases from the United States for the week include the manufacturing index, building permits, housing permits and existing home sales.

Limlingan said the Fed’s Beige Book is also scheduled to be released this Friday.

He said oil prices slipped anew with the Brent crude oil futures down to USD91.63 per barrel and the West Texas Intermediate (WTI) to USD85.61 per barrel.

Meanwhile, the local currency again closed at 59.00 to a US dollar, the fourth time to date, particularly for this month, from 58.927 close last Friday.

It opened the day flat at 58.97 and traded between 58.92 and 59. The average level for the day stood at 58.993.

Volume reached USD524.9 million, lower than the USD542.8 million in the previous session.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the peso’s weakness to the US dollar’s correction “after continued hawkish statements from Fed officials that led to higher US Treasury yields.”

He said yield of the benchmark 10-year US Treasury posted a new 14-year high after hitting 4.96 percent “thereby increasing the attractiveness/allure of the US currency with higher interest rate income on US dollar-denominated deposits/bonds/fixed income investment.”

“Nevertheless, the peso exchange rate remained relatively stable vs. the US dollar for the fourth straight week already at below the 59.00 psychological mark after global crude oil prices eased to new one-week lows recently and after BSP (Bangko Sentral ng Pilipinas) Governor (Felipe) Medalla signaled that the Philippine economy is strong enough to withstand rate increases,” he added.

Ricafort said the local currency also got a boost after Finance Secretary Benjamin Diokno, who is a member of the central bank’s seven-man policy-making Monetary Board (MB), recently said the BSP has started a move to moderate sudden movements in the foreign exchange rate like looking into possible cases of speculative activities.

He forecasts the peso to trade between 58.85-59.00 to a US dollar on Tuesday. (PNA)

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