Peso stronger from expected higher remittances

BY MARIA ELOISA I. CALDERON, BusinessWorld Reporter The peso on Wednesday appreciated against the dollar as banks unloaded greenback stocks ahead of the Lenten break when remittances from Filipino workers abroad are expected to pile up. It closed at an intraday high of P48.05, climbing by P0.12 from Tuesday’s finish. "The market squared their dollar positions in view of the long weekend. They sold dollars," a currency dealer said. "Since it’s a long weekend, banks have been selling the dollar on expectations of strong flows," another trader said. Financial markets are shut starting Thursday until Monday as the predominantly Catholic country observes Lent. Trading resumes Tuesday. The overall weakness of the dollar against regional currencies has also buoyed the peso, dealers said. Risk-averse investors have been returning to emerging market assets as concerns over the health of the United States economy ebbed. "The dollar is weak. Investors are seeking higher-yielding assets like the Philippine peso," a currency dealer said. The peso opened at P48.12 and reached a low of P48.165 before settling at its intraday high of P48.05. It averaged at P48.116 from P48.268. Volume of transacted dollars slid to $420.26 million from Tuesday’s $620.5 million. Dealers forecast the peso to break the P48:$1 barrier next week, mainly helped by strong dollar inflows from overseas workers and portfolio investments into the equities market. "After consolidating between P48.03 and P48.40, the peso might break the P48 figure next week," a currency dealer said.