The peso is back at P54:$1 but the stock market is falling

The peso returned to the P54:$1 level on Tuesday, gaining for the fourth straight day in its strongest showing in over six months.

The closing price P54.87:$1 was 24 centavos better than the previous session, and it was also the best coin since June 28, 2022 P54.77 per dollar.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso rallied due to the latest trade data showing the deficit at its “narrowest level in more than a year or since August 2021”.

“The peso is supported in part by recent net gains in the domestic stock market, PSEi (Philippine Stock Exchange Index), to one-month highs and also among 4.5-month highs, with foreign net buying recently,” Ricafort added.

Still, the benchmark PSEi index closed Tuesday down just under half a percent, or 33.55 points, to 6,756.69. Analysts blamed the lack of catalysts and mixed signals from the US markets.

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It rose for three consecutive days at the start of the year but fell on Friday before recovering slightly on Monday.

Meanwhile, the broader all shares lost 9.74 points, or 0.27 percent, to end the day at 3,559.23.

“Philippine stocks closed slightly lower after a mixed start for the US with the Nasdaq (0.6 percent) the only index closing in the green,” said Louis Lemlingan, managing director at Regina Capital Development Corp..

Meanwhile, the Dow Jones and the Standard & Poor’s 500 fell 0.3 percent and 0.1 percent, respectively, as investors noted that there was a possibility that the Federal Reserve (Fed) could slow the economy and reduce inflation without reversing a recession because it takes a position of risk.”

Ricafort said the PSEi “corrected lower and is partly in line with an overnight downward correction in US stock markets after the recent upbeat signals from some Fed officials saying interest rates could exceed 5 percent.”

Claire Alvear, research assistant at Philstocks Financial Inc. Market support remained at 6600 as investors took profits near the immediate resistance at 6800.

The peso opened at a high of 54.95 pesos to the dollar and traded as low as 54.80 pesos for the day.

Total volume was $1,067.95 billion, down from $1,219.55 billion on Monday.

In the stock market, all sectoral indices except services (up 0.79 percent) closed in the red. Industries led the decline with a decline of 1.16 percent.

2.513 billion shares were traded, at a value of 20.64 billion pounds.

Losers outnumbered gainers, at 101 versus 86, while 51 remained unchanged.

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