THE PESO weakened versus the greenback on Friday as imports continued to increase, reflecting a likely increase in dollar demand as external trade improves.
The local unit closed at P50.40 per dollar on Friday, shedding 16.5 centavos from its P50.235 finish on Thursday, data from the Bankers Association of the Philippines showed.
Week-on-week, the peso also depreciated by 43 centavos from its finish of P49.97 on Aug. 30.
The peso opened Friday’s session at P50.30 per dollar. Its weakest showing was at P50.47, while its intraday best was at P50.20 against the greenback.
Dollars exchanged declined to $1.28 billion on Friday from $1.47 billion on Thursday.
The peso declined following the release of June trade deficit data, which showed imports continued to rise, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
Data released by the Philippine Statistics Authority on Friday showed the trade deficit widened to $2.83 billion in June against the $1.42-billion gap a year earlier. Last month’s trade deficit, however, narrowed compared to the $3.17-billion shortfall in May.
Imports climbed 34.2% to $9.33 billion in June from a year earlier while exports increased 17.6% to $6.51 billion from last year.
Year to date, the trade balance widened to a $17.44-billion deficit from the $11.37-billion gap in the first semester of 2020.
Meanwhile, a trader attributed the peso’s weakness to preference for the greenback amid positive market sentiment due to positive US jobless claims data.
Data from the US Labor Department showed initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 385,000 for the week ended July 31, Reuters reported. This was its lowest level since the pandemic started in March 2020. — L.W.T. Noble with Reuters