ILOILO City – It was a mixed bag last week, as the Philippine peso slid down to the 53 level against the dollar – closing at $1:P53.516 on Aug. 31.
Despite the currency’s weak performance, though, the Philippine stock market index (PSEI) managed to maintain a strong position at 7,800 level – at 7,855.71 as of late Aug. 31 – indicating strong buying pressure.
Local technical analyst Hernan Segovia argues that the peso’s weakness is not due to any problems in the economy, but due to the strengthening dollar.
“That’s why the peso is weak at P53.60 and is overbought, so on the short term, it might go down; go back to P52,” he said.
Segovia’s thesis is supported by the Philippines Stock Exchange index’s (PSEi) own good performance last week, which managed to avoid losing its previous gains by staying at the 7,800 level ,despite political noise from the administration and international trade.
“The Philippine stock index closed at 7,800 level, and it’s understandable since that’s a hard resistance. That’s the level to breach,” Segovia said, explaining that the market will not go up any further until that level has been breached.
“Based on this the PSEi did very good. It’s holding well, and I think it will continue being bullish this September,” he adds./PN
