Peso climbs on vaccine arrival, soft US jobs report

THE PESO climbed versus the dollar on Monday as more vaccines arrived in the country and after the release of weaker-than-expected US data. — BW FILE PHOTO

THE PESO strengthened versus the greenback on Monday on the back of the arrival of more vaccines, which could help the government reach its vaccination target and reopen the economy.

The local unit closed at P47.66 per dollar on Monday, appreciating by nine centavos from its P47.75 finish on Friday, based on data from the Bankers Association of the Philippines’ website.

The peso opened Monday’s session stronger at P47.68 against the dollar. Its weakest showing was at P47.725, while its intraday best was at P47.65 versus the greenback.

Dollars exchanged rose to $724 million on Monday from the $718.1 million recorded on Friday.

The peso strengthened versus the dollar as the country received more doses of vaccines against the coronavirus disease 2019 (COVID-19), Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

The National Task Force said one million doses of vaccines from Sinovac Biotech Ltd. arrived on Sunday.

The country has so far administered 5.965 million vaccine doses, based on data from the Department of Health.

The government targets to vaccinate 50 million adult Filipinos by end-November and 70 million Filipinos by the first quarter of 2022.

However, only 1.544 million individuals have completed their two vaccine doses. Only 1.12% of the country is already fully vaccinated against the virus, based on data from Johns Hopkins University.

The peso’s appreciation versus the dollar was also supported by recent US data and its possible implication on the Federal Reserve’s policy actions, a trader said.

“The peso appreciated as the weak US jobs data hinted at a continual need for the Federal Reserve’s accommodative policy stance,” the trader said in an e-mail.

The dollar began the week on the defensive after being dented by a second batch of disappointing jobs figures, as traders turned to whether upcoming inflation data could add pressure on policy makers to taper monetary stimulus, Reuters reported.

The possibility of a slowdown in bond buying is also in focus leading up to a European Central Bank meeting on Thursday, and both concerns kept a lid on price moves in Asia.

The Fed is holding rates at near zero and buys $120 billion in bonds every month in order to suppress financing costs and hence support economic growth — but policy makers have begun inching toward a discussion about winding that help back.

Friday’s jobs data, which showed US nonfarm payrolls increasing by 559,000 in May, fell 90,000 jobs short of expectations and seemed to allay fears of premature policy tightening and higher rates driving a firmer US dollar.

For Tuesday, Mr. Ricafort gave a forecast range of P47.60 to P47.72 per dollar while the trader expects the local unit to move within the P46.60 to P47.80 range. — L.W.T. Noble with Reuters