Peso tracks peers, closes at strongest level vs dollar in 3 months
(philstar.com) – November 7, 2018 – 10:26 pm
MANILA, Philippines – The peso vaulted back to the 52-to-a-dollar territory on Wednesday, following regional trends to close its strongest level against the greenback in three months.
The local currency appreciated 7.5 centavos against the US dollar to finish at 52.95, its strongest since August 6 when it closed 52.85 to a dollar.
The volume was also heavy on the foreign exchange market, with $ 1,447 billion worth of trades on Wednesday, up from $ 983.78 million the previous day.
The peso gained strength from the greenback together with the Asia-Pacific peers like the Singapore dollar, Thai baht, Malaysian ringgit and Indonesian rupiah as investors were drawn in midterm election results in the US.
US midterm polls
US President Donald Trump's economic agenda for the first time in eight years is the economic agenda for the likes of the Democrats. .
At the Senate, Republicans retained their majority, making a clash in the White House Congress and with over Trump's nationalist agenda likely.
While analysts say the new composition of the US Congress bodes are well-known for checks and balances, investors have often felt far from uncertain parties.
At home, the peso's strength also came after the government revised upwards the economy of the second-quarter growth performance, ahead of Thursday's report for the third quarter.
GDP grows faster at 6.2 percent
In a statement on its website, the Philippine Statistics Authority said gross domestic product (GDP) grew by 6.2 percent in April-June period, up from the original estimate of 6 percent.
"Major contributors to the upward revision were other services, real estate, renting and business activities, and mining and quarrying," PSA said.
The revision meant that for the first half, GDP expanded 6.4 percent, up from the initial reading of 6.3 percent.
The third-quarter GDP on Thursday PSA will report and analysts expect growth to have decelerated further due to high inflation, which has a steady near decade-high of 6.7 percent in October.
Last month, the Duterte administration lowered its growth target from 7-8 percent to 6.5-6.9 percent due to fast inflation as well as the impact of the US trade war with China on Philippines' trade performance.