Peso moves sideways, PSEi posts gains

By Joann Santiago

MANILA, Aug. 20 (PNA) — A rebound in US’ housing sector along with anticipations on what would be revealed by the minutes of the Federal Open Market Committee (FOMC) weakened the Philippine peso to a dollar but spared the local bourse Wednesday.

The local currency ended the day at 43.83 from the previous finish of 43.64, which a trader attributed to investors’ decision to stay at the sidelines ahead of the release of the FOMC meeting minutes Wednesday night (Manila time).

The trader said some analysts and traders expect the minutes to be disclosed when US monetary think is the best time to end the Federal Reserve’s stimulus program, which to date amounts to USD 25 billion monthly.

Investors are also on the look-out on the Fed’s take regarding the possibility of an earlier-than-expected hike in interest rates.

Markets expect the Fed to exit from the stimulus program by October this year but rate hike is expected to be implemented only in the middle of 2015.

Relatively, the US’ Commerce Department on Wednesday announced the rebound on the world’s largest economy’s construction sector last July, which grew by 15.7 percent.

The trader said this helped the markets turn to the US dollar more instead of the local currencies.

Similarly, it will be a holiday in the Philippines Thursday, for the commemoration of the Ninoy Aquino Day, and the trader said this also factored in during the day’s currency trading.

”But it’s more of the Fed minutes because we’ll be able to react only on Friday,” the trader said.

For the day, the peso started the trade at 43.76, sideway from the 43.72 a day ago.

It traded between 43.73 and 43.85 bringing the day’s average at 43.78.

Volume of trade reached USD 802.6 million, higher than the USD 586.8 million a day ago.

The trader expects the peso to trade between 43.70 and 44.000 on Friday.

Relatively, the Philippine Stock Exchange index (PSEi) sustained its rise Wednesday after it gained by 0.19 percent or 13.74 points to 7,096.49 points.

Most of the sectoral counters tracked the main index led by the services with 1.06 percent or 23.10 points increase to 2,203.13 points.

The other indices that posted improvements are the industrial, property, and financials.

On the other hand, the mining and oil and the holding firms ended the day with losses.

Volume trade reached almost 1.4 billion amounting to P10.81 billion.

Gainers led losers at 93 to 79 while 42 were unchanged. (PNA)