Seasonal inflows continue to buoy peso strength vs. dollar

The Philippine peso continued to appreciate against the US dollar on Thursday, buoyed by seasonal inflows ahead of the holidays.

The local currency gained 9.5 centavos to close at P50.705:$1 versus Wednesday's P50.8:$1.

In an email interview, ING Bank Manila senior economist Nicholas Antonio Mapa attributed the peso's strength to remittance flows ahead of the Christmas season.

"The peso strengthened again on Thursday despite another round of net foreign selling in the local equity market with investors still monitoring developments on the trade front," he said.

"Seasonal inflows may be supporting the local unit with remittances likely entering the market ahead of the holiday season," Mapa explained.

Foreign funds bought P2.709 billion of shares during the session and sold P3.453 billion for a net selling position of P744.163 billion.

Moving forward, Mapa said peso-dollar trading may be affected by the tensions between China and the United States.

"Emerging market currencies may be pressured in the near term as US-China tensions may escalate after Trump signed off on new legislation expressing support for Hong Kong protesters," he said.

According to a Reuters report, Trump said the US and China were already close to an agreement on the first phase of a deal, but stressed Washington's support for protestors in Hong Kong. — RSJ, GMA News