MANILA – Both the local currency and stock market started the trading week in negative territory amid mixed economic data overseas.
The Philippine peso shed P0.10 against the US dollar during the day’s trading, closing at 52.98 from last week’s closing of 52.88 to a greenback.
According to DailyFX Junior Analyst Daniel Dubrovsky, the peso is under pressure due to the trade deficit and weak data from China even while US data remained strong.
“The Philippine peso particularly underperformed, focusing more on trade developments than the central bank holding rates unchanged at 7.75 percent,” said Dubrovsky.
“Not only did the trade deficit widen to its largest on record but estimates for the current account deficit in 2019 increased. Generally speaking, when imports outpace exports, a currency can depreciate as demand for it falls,” he added.
The peso opened the day weaker at P53.05 from Friday’s kick off at P52.66 to a dollar.
It traded between P52.95 and P53.08, bringing the average level for the day at P53.01.
Volume of trade amounted to USD685.95 million, higher from last week’s USD677.75 million.
The China’s growth concerns and stronger US data also slowed down Philippine Stock Exchange index (PSEi).
PSEi ended the day at 7,520.40 points, decreasing by 3.97 points, although all shares increased by 3.60 points to 4,510.10 points.
The biggest drop on Monday was recorded in mining and oil, down by 193.17 point to 8,005.38. This followed by holding firms, which shed by 40.29 points to 7,389.82 points, while financials was lower by 12.39 points to settle at 1,773.16 points from last week’s trading.
Gainers for the day were property, up 19.95 points to 3,661.12 points; industrial, up by 15.85 points to 10,978.85; and services, up by 15.62 points to 1,446.69 points.
“US-China trade tensions abated marginally this week as China made the first order of US soybeans after the G20 meeting and announced it would suspend additional tariffs on US-made autos and auto parts for three months from January 1, 2019. Stocks closed lower on Friday after weaker-than-expected Chinese data,” said Regina Capital Managing Director Luis Limlingan.
“Macro data however was strong in the US. Industrial production increased by 0.6 percent in November, three tenths above consensus expectations. Business inventories rose 0.6 percent in October, in line with expectations,” Limlingan added. (PNA)
