Peso weakens on rising COVID-19 cases, US outlook

THE PESO weakened against the dollar as coronavirus cases in the country continued to rise and with the economic outlook in the United States showing some improvement. — BW FILE PHOTO

THE PESO retreated against the greenback on Monday amid cautious sentiment due to the continued increase in infections and with the dollar becoming more appealing as the US economy moves to reopen.

The local unit closed at P48.56 per dollar on Monday, depreciating by two centavos from its P48.54 finish on Thursday, based on data from the Bankers Association of the Philippines. The market was closed on Friday for the Day of Valor.

The peso opened Monday’s session at P48.56 per dollar. Its weakest showing was at P48.585 while its intraday best was at P48.56 against the greenback.

Dollars exchanged dropped to $373 million from $659.28 million on Thursday.

The peso weakened due to the continued increase in infection cases which dampened market sentiment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

Coronavirus disease 2019 (COVID-19) cases in the country totaled 11,378 on Monday to bring the tally to 876,225. Active cases reached 157,451.

Meanwhile, a trader in an e-mail said the peso’s depreciation was due to investors’ preference for the dollar after a stronger-than-expected US producer inflation report.

Data from the US Labor department released on Friday showed the producer price index for final demand rose 1% in March, picking up from the 0.5% pace in February, Reuters reported, noting this shows the economy’s reopening amid improved public health environment and substantial fiscal response.

US Federal Reserve Chairman Jerome Powell on Thursday stressed the inflation pickup will be transitory, adding he expects supply chains will adapt and become more efficient.

For today, Mr. Ricafort gave a forecast range of P48.50 to P48.60 per dollar while the trader expects the local unit to move within the P48.45 to P48.65 levels. — L.W.T. Noble