Peso rises further against dollar

THE PESO strengthened for the third consecutive day, showing resilience even with more people in China testing positive for the coronavirus disease 2019 (COVID-19) and as agent banks bought up the local currency.

The local unit ended trading at P50.50, appreciating further by seven centavos from its Wednesday finish of P50.57.

The peso started trading at P50.57 per dollar on Thursday. Its weakest showing was at P50.59 while its intraday best was at P50.43 against the greenback.

Dollars traded climbed to $1.106 billion from $813.67 million on Wednesday.

A trader attributed the peso’s strength to buying interest for a certain range during the day.

“This is due to the credit outlook upgrade of Fitch [Ratings], ’yun pa rin (still). So we hit a low of P50.43 but we see some agent banks buying at those levels… From 50.43-P50.50, bumibili sila kaya tumaas ’yung close today (they bought at those levels that is why the peso closed stronger today),” the trader said on Thursday.

Fitch upgraded its outlook for the Philippines’ credit rating to “stable” from “positive,” saying it expects the country to see a continued sound macroeconomic policy framework to help bolster growth and to keep inflation in track.

A positive outlook means that the credit rating could be upgraded in a year or two. Fitch maintained its credit rating for the Philippines at “BBB,” which is one step closer towards the single “A” level the government is eyeing.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the peso seemed to be resilient on Thursday despite some negative developments regarding the outbreak of COVID-19.

“The optimism that the COVID-19 outbreak infections are slowing was jolted by the additional 15,000 cases from Hubei province because of a change in methodology. However, the peso seem to be discounting this surprise,” he said in a text message.

Mr. Asuncion said the market may still be factoring in the recent outlook revision by Fitch.

Reuters reported that the number of people infected in Hubei where the virus originated grew by 14,840 on Thursday, which brought total figures to 48,206 cases.

The new methodology for diagnosis has also seen the death toll rise by 242 to 1,310, according to Chinese health officials.

Health officials in Hubei, which is the ground zero of the epidemic, said that they started including people diagnosed using a new method. Excluding cases confirmed using the new methods, the number of new cases rose by only 1,508, the official data showed.

Last week, the provincial health commission of Hubei said that it would start recognizing computerized tomography or CT scan results as a way to confirm afflicted individuals, in order to isolate patients more quickly in hospitals.

For today, the trader sees the peso trading at a range of P50.40 to P50.60 versus the dollar, while Mr. Asuncion gave a forecast range of P50.40 to P50.70. — L.W.T. Noble with Reuters