Peso down vis-à-vis Yellen’s Congressional speech, PSEi recovers

MANILA, July 15 (PNA) — Combination of uncertainties on the speech of Federal Reserve Chairman Janet Yellen before US lawmakers this week along with possible impact of Typhoon Glenda on the economy in general made the peso weaken to a dollar Tuesday.

The local currency shed P0.12 after it capped the day at P43.61 from P43.48 Monday.

BPI lead economist Emilio Neri Jr. said the peso closed in line with regional trend due in part to Yellen’s speech before US Congress since last night.

He said Yellen is also expected to speak before the US Senate, thus, the anticipation on what she will disclose increased.

”The markets are more cautious after what happened after her speech before Congress a few months ago. Hopefully, the peso will not weaken as before especially if she will not say anything new,” he said.

Neri said the speech of President Benigno Aquino III Monday night, wherein he explained the reason for the implementation of the Disbursement Acceleration Program (DAP), also factored in during the day’s currency and stocks trading.

He said the impact is limited “but it was not totally shrugged-off.”

”There’s a slight uncertainty that it might cause some tension among the major branches of the government,” he said.

Relatively, Tropical Storm “Glenda” is now causing heavy rains in some Bicol Region provinces as well as other Luzon provinces.

The typhoon is a strong one and Neri raised the possibility that currency and stocks trading might be suspended if it results to heavy rains even in the National Capital Region.

The peso started the day at P43.53, sideways from the P43.50 a day ago.

It traded between P43.67 and P43.51 bringing the day’s average to P43.59.

Volume of trade reached US$ 846.3 million, higher than the US$ 529.3 million Monday.

For Wednesday, the peso is expected to trade between P43.50 and P43.70.

For the rest of the month, the peso is expected to trade generally quiet unless there are reports that are unexpected.

”It is expected to trade closer to the 43.50-level until the rest of the month,” Neri added.

Relatively, the Philippine Stock Exchange index (PSEi) recovered Tuesday after gaining 0.05 percent or 3.67 points to 6,834.04 points.

The sub-indices posted mixed results with half of it registering improvements while the other half ending on the red.

Those that registered gains are led by the mining and oil, which grew 0.62 percent or 101.33 points to 16,487.46 points.

The other gainers are the holding firms and the financials.

On the other hand, the industrial counter posted the highest decrease with 0.29 percent or 29.80 points to 10.310.90 points.

This was followed by the property and services as well as the all shares index.

Volume of trade reached 1.41 billion amounting to P5.7 billion.

Decliners led advancers at 114 to 65 while 45 were unchanged. (PNA)