Peso extends winning streak vs. US dollar

The Philippine peso extended its winning streak against the US dollar on Tuesday, buoyed by positive economic data released during the trading session.

The local currency gained 8 centavos to close at P50.5:$1 versus Monday's finish of P50.58:$1.

In a mobile message, Rizal Commercial Banking Corporation (RCBC) attributed Tuesday's appreciation to the local economic data.

"The peso exchange rate vs. the US dollar strengthened... after the stronger growth exports data and the slower growth in imports data, resulting in a narrower trade deficit," he explained.

The Philippine Statistics Authority (PSA) earlier on Tuesday reported the trade gap at $3.50 billion in January, lower than the $3.92-billion deficit in January 2019.

"Stronger FDI data for the month of December 2019 also supported the peso," Ricafort added.

FDIs posted net inflows of $1.153 billion in December, up by 69% from the same month in 2018. Despite this, FDIs posted inflows of $7.647 billion in 2019, down by 23.1% from $9.949 billion the previous year.

Ricafort said Tuesday's performance was also affected by the drop in global oil prices, as well as the drop in US equity prices.

"Peso also stronger after global oil prices remained among the lowest in four years, which could further lower the country's import bill and further narrow the country's trade deficit, as well as help further ease the country's inflation that could support possible further cut in local policy rates," he elaborated. — BM, GMA News