Peso stronger as US jobless claims rise, COVID-19 spikes in California

The Philippine peso closed stronger against the greenback on Friday as reports on the rise of US jobless benefits claims and a spike in COVID-19 cases in California reduced the allure of the dollar.

The local currency gained 3.5 centavos to close at P49.33:$1 from Thursday’s finish at P49.365.

This is the strongest for the local unit in almost four years when it closed at P49.17:$1 on November 15, 2020, according to Rizal Commercial Banking Corp. chief economist Michael Ricafort.

“The peso exchange rate closed stronger vs. the US dollar today amid continued weakness of the US dollar vs. major global currencies... after weaker US initial jobless claims data (first weekly rise since March 2020) that could signal weaker economic recovery amid the spike in new COVID-19 cases in some US states such as in California,” Ricafort said.

The US Labor Department reported that new applications for unemployment benefits increased by a seasonally adjusted 109,000 to 1.42 million as of July 18.

Meanwhile, California reported a record increase of more than 11,800 new cases of COVID-19.

If California were a country, it would rank fifth in the world for total cases at nearly 400,000, behind the United States, Brazil, India and Russia, according to a report by Reuters.

“Since the start of 2020, the peso has already appreciated by P1.305 or 2.6%,” Ricafort said. — DVM, GMA News