THE PESO may appreciate further versus the dollar this week amid continued volatility due to the extended lockdown and rising coronavirus disease 2019 (COVID-19) infections.
On Friday, the local unit ended at P50.37 per dollar, gaining 18 centavos from its P50.55 finish on Thursday, based on data from the Bankers Association of the Philippines.
Week on week, the peso climbed by 11 centavos from its P50.48-per-dollar close on Aug. 13.
The local currency may strengthen this week as the market is expected to remain highly volatile amid an extended lockdown in Metro Manila, Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc., said.
Metro Manila is under modified enhanced community quarantine (MECQ) for the rest of the month, with restrictions loosened slightly from the strictest form of lockdown as cases remained high amid the persisting threats of the more contagious Delta variant.
Investors are likely to closely monitor the adjustments in quarantine restrictions as well as the country’s COVID-19 infection tally after it registered a record high number of cases on Friday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber.
The Health department reported 17,231 new local coronavirus infections on Friday, the highest recorded so far.
Health authorities attributed the surge in possible breaches in health protocols and the presence of the more contagious variant of COVID-19.
Mr. Ricafort said the arrival of vaccines in the coming days and a faster vaccination program should help brighten the near-term outlook for the economy.
Meanwhile, Mr. Asuncion said traders will also watch out for hints from US Federal Reserve Chairman Jerome Powell’s speech at the annual Jackson Hole economic symposium on Aug. 26-28 on the central bank’s plan to taper its bond purchases.
The US central bank chief may provide details on the timing of Fed’s plans of scaling back its bond-buying program that has helped buoy the financial markets since the coronavirus pandemic last year, Reuters reported.
Mr. Asuncion expects the peso to range from P50.20 to P50.70 per dollar this week, while Mr. Ricafort gave a P50.15 to P50.55 forecast range. — BML with Reuters