Remittances, aid money prop peso as week starts

The peso snapped a two-day decline against the greenback on Monday, buoyed by holiday remittances and dollar inflows from international pledges for post-Yolanda rehabilitation. 

 

The local currency strengthened by 10.5 centavos to 43.655$1 from 43.76 Friday. 

 

“We were, basically, stronger on remittance flow as donations and pledges kick-in and overseas Filipinos send in money for the holidays,” said a trader at one of the Philippines's Top 7 banks in terms of resources. 

 

The Bangko Sentral ng Pilipinas expects to beat its remittance growth forecast of 5 percent as Filipinos continue to send in money, especially with Christmas just around the corner. 

 

International aid agencies and nations, meanwhile, have pledged billions of dollars worth of aid and loans for relief and rehabilitation of areas destroyed by Typhoon Yolanda, the strongest to make landfall in recorded history. 

 

A second trader from a foreign bank also said good manufacturing data in China “provided support for Asian currencies.” 

 

Reuters reported that China's factory activity maintained steady growth momentum in November, despite the pace of expansion easing slightly from October, final HSBC/Markit PMI showed.

 

The final PMI reading came in at 50.8 in November, down from 50.9 in October but improving from a preliminary reading of 50.4. A reading over 50 points to an expansion. 

 

The dollar also weakened against major Asian currencies as investors gave up greenbacks ahead of a number of US economic data that could provide hints on the timing of the Federal Reserve on tapering its bond purchases, the second trader said. 

 

Manufacturing, home sales, weekly jobless claims, new payrolls and unemployment numbers are set for release in the US this week, according to The Wall Street Journal's Market Watch. 

 

Cash transfers from overseas Filipinos will continue to prop the peso up, the traders said, forecasting the local currency to move within the 43.50 to 43.80 per-dollar band on Tuesday. – VS, GMA News