Peso declines on weaker PMI

THE PESO weakened versus the greenback on Monday on weaker factory activity data and the rise in coronavirus disease 2019 (COVID-19) cases in the country.

The local unit closed at P55.31 per dollar on Monday, depreciating by 18 centavos from its P55.13 finish on Friday, based on data from the Bankers Association of the Philippines.

The peso opened Monday’s session at P55.35 per dollar. Its weakest showing was at P55.45, while its intraday best was at P55.31 versus the greenback.

Dollars exchanged decreased to $1.05 billion on Monday from $1.57 billion on Friday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso declined on weak manufacturing data released on Monday.

“Peso also weaker partly due to new 5.5-month highs in new COVID local cases above 4,000 per day recently, as well as the first monkeypox case detected in the country late last week,” Mr. Ricafort added.

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) fell to 50.8 in July from 53.8 in June, marginally above the 50 mark that separates growth from contraction, data released on Monday showed.

Meanwhile, the Philippines recorded 4,159 new COVID-19 cases on Sunday, bringing active infections to 33,722, data from the Department of Health (DoH) showed.

The country also reported its first case of the monkeypox virus, a 31-year-old Filipino who arrived from overseas on July 19, the DoH announced on Friday.

“The peso weakened amid market expectations of strong US unemployment and nonfarm payrolls reports for July 2022,” a trader said in an e-mail.

“However, the local currency might recover due to potentially weaker US manufacturing PMI data overnight,” the trader added.

For Tuesday, Mr. Ricafort gave a forecast range of P55.15 to P55.40 per dollar, while the trader expects the local unit to move within P55.20 to P55.40. — Keisha B. Ta-asan