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Tuesday, September 11, 2012

Peso hits 2-year high as investors dump the US dollar

MANILA - The peso hit a new high of 41.54 vis-à-vis the US dollar for this year as investors dumped the greenback on the back of the positive sentiment towards the Euro zone over the weekend.
At the Philippine Dealing System, the peso opened 11 centavos stronger at 41.57 against the dollar from 41.68 on Friday. This erased the previous high recorded on July 19 when the local currency reached 41.57 against the greenback.
The peso traded between 41.54 and 41.620 before settling at 41.615 on Monday, with total volume reaching $425 million.
According to Metrobank Research, the positive sentiment over the recent European Central Bank meeting triggered some risk trading overnight, prompting global markets to dump the US dollar across the board. Asia, including the Philippines, followed suit.
Last Friday, there was aggressive selling of the dollar as US payrolls in August rose less than expected at 96,000 from an estimate of 130,000, or lower than the revised 141,000 additional jobs in July. 
Unemployment numbers also did not help as the rate unexpectedly dropped to 8.1 percent with more Americans leaving the labor force.
All these factors are negative to the dollar, a currency trader said.
Meanwhile, China's growth trajectory is a mixed bag, with industrial output coming below expectations at 8.9 percent against the expected 9.1 percent. Retail sales in August were within the expected 13.2 percent. The producer price index dropped faster than expected and consumer price index accelerated.
With these factors at play, Metrobank sees the peso trading within 41.5-41.80 for the rest of Monday.

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