Peso climbs on profit taking after national elections

THE PESO appreciated against the greenback on Tuesday on profit taking as the market awaits clarity on the policies of the next administration following the partial results of the national polls and as oil prices declined.

The local unit closed at P52.37 per dollar on Wednesday, shedding 13.5 centavos from its P52.50 finish on Friday, Bankers Association of the Philippines data showed.

Philippine financial markets were closed on Monday for the national elections.

The peso opened Tuesday’s session at P52.499 versus the dollar, which was also its weakest showing for the day. Meanwhile, its intraday best was at P52.34 against the greenback.

Dollars exchanged fell to $691.6 million on Tuesday from $878.5 million on Friday.

“The peso appreciated due to cautious profit-taking as investors remain on the sidelines following the win of [Ferdinand “Bongbong” R. Marcos, Jr.],” a trader said in an emailed message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message said the peso appreciated amid “generally peaceful elections,” adding that the market is waiting for details on the reforms and economic policies planned by the next administration.

Mr. Marcos’ runaway victory in Monday’s election looked certain when early results of an unofficial vote poured in and with 95% of the eligible ballots counted, he had more than 30 million votes, double that Vice President Maria Leonor G. Robredo, Reuters reported.

An official result is expected around the end of the month.

Mr. Ricafort added that the peso improved after global oil prices eased to one-month lows.

Oil prices dropped more than 1% on Tuesday, extending the previous day’s steep declines as coronavirus lockdowns in top oil importer China, a strong dollar and growing recession risks fed worries about the outlook for global demand, Reuters reported.

Brent crude was down $1.19 or 1.1% at $104.75 a barrel while US West Texas Intermediate crude fell $1.07 or 1% to $102.02 a barrel.

For Wednesday, Mr. Ricafort gave a forecast range of P52.32 to P52.47 per dollar, while the trader expects the local unit to move within P52.25 to P52.45. — T.J. Tomas with Reuters

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