Victor A. Abola, economist at the University of Asia and the Pacific (UA&P), made the projection during the First Metro Investment Corp. (FMIC) Mid-year Economic Briefing in Makati City. FMIC is the investment arm of the Metro Bank.
“We’re seeing that the US economy and surprisingly, EU and Japan are doing better. That means the dollar is expected to be stronger,” Abola said.
The peso weakened further against the US dollar on Monday, July 10, as it slipped to another fresh low of 50.695, the weakest so far this year as the greenback strengthened due to expectations of better prospects for the US economy.
This is also the lowest the peso has reached since Sept. 1, 2006, when it was 50.700 against $1.
Meanwhile, the total volume traded sank to $439 million from Friday’s $515 million.
“The USD has been supported by the strong US payrolls data last Friday, which showed 222,000 job gains and indicated continued strength in the US economy,” said Rajiv Biswas, Asia-Pacific chief economist at IHS Markit.
On July 3, the Philippine peso fell to P50.545:$1, the weakest since closing at P50.65 on September 12, 2006, but softened even more at P50.600:$1 on Wednesday, July 5.
“Although temporarily it (the dollar) showed weakness, but with the 10-year US bonds rising in a week, that’s a clear sign of attracting more funds to US treasuries,” Abola said.
The local currency finished the week at 50.58, slightly better than its nearly 11-year low of 50.67 to a greenback.
A trader pointed this to investors taking advantage of the recent US dollar rally on expectations of continued normalization of Fed rates.
Another factor is investors decision to stay at the sidelines ahead of the release later in the day of the June 2017 nonfarm payrolls report, the trader said.
It was a mix results for the other indices, with the broader All Shares down 0.04 percent, or 1.73 points, to 4,735.12 points.
Half of the sectors finished with increases namely the Financials, 0.66 percent; Services, 0.27 percent; and Property, 0.11 percent.
On the other hand, the Holding Firms, Mining and Oil, and Industrial declined by 0.34 percent, 0.14 percent, and 0.07 percent, respectively.
Total volume reached 2.03 billion shares amounting to P6.9 billion.
Losers led gainers at 104 to 102 while 46 shares remained unchanged.