Peso stays strong for second straight trading day

The peso rose against the dollar Monday as positive data and technical correction weighed on the greenback.

The local currency strengthened by 18.5 centavos to 44.42:$1 from 44.605 Friday. Trading volume reached $991.7 million compared with $884.3 million on Friday.

“Well, the peso strengthened today still on late reaction on the positive GDP (gross domestic product data) we had and also on positive manufacturing data in China,” a trader at a local bank said.

“It was also a correction after being overdone last week. So, the correction coincided with good data,” he said.

Led by the Korean won and Singapore dollar, regional currencies also rallied on strong China data showing factory activity expanding for the first time in four months in August.

The final HSBC/Markit Purchasing Managers' Index (PMI) climbed to 50.1 in August, up sharply from July's 47.7, Reuters reported.

A reading above 50 suggests manufacturing growth, while an outcome below 50 points reflects a contraction.

Last week, the Philippine government reported the economy grew by 7.5 percent in the second quarter

— faster than all Southeast Asian economies and at the same pace as China.

“There was risk appetite coming from the US as [President Barrack] Obama is still seeking Congressional approval to attack Syria. This eased concerns, in the meantime,” a second trader said in a separate interview.

While Obama pressed his case for military action in Syria after a chemical weapons attack killed more than a thousand mostly civilians in the capital Damascus, Reuters reported that he will have to seek Congressional support and approval.

“A Congressional approval might take a week, so that's the problem lifted from the market for a week,” the second trader said.

Traders see the peso moving between the 44.30 to 44.60 per dollar band on Tuesday. — VS, GMA News

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