Risk-on sentiment drives peso strength

The Philippine peso rebounded against the US dollar on Tuesday, driven by risk-on sentiment during the trading session.

The local currency gained 8.5 centavos to close at P50.695:$1 versus Monday's finish of P50.78:$1.

In an email interview, ING Bank Manila senior economist Nicholas Antonio Mapa attributed Monday's performance to the risk-on tone.

"General risk on tone although gains were likely capped by the fact that 2019 nCoV continues to spread," he said.

The Department of Health (DOH) on Monday reported that the number of persons under investigation (PUI) for possible infection has risen to 314.

Meanwhile, over 1,000 people have so far died in China, with most deaths recorded in the provincial capital of Wuhan, the epicenter of the outbreak.

"Strong export growth may have helped although most investors understand that 2020 will likely be a different story," added Mapa.

Data released by the Philippine Statistics Authority (PSA) earlier in the day showed that export shipments increased by 21.4% to $5.74 billion in December 2019.

Mapa said the peso is likely to sustain its strength given the credit rating upgrade from Fitch.

"For tomorrow, the Peso may sustain its appreciation trend as Fitch affirms PHL credit rating at 'BBB' and bumped up its outlook from stable to Positive," he said. — BM, GMA News