MANILA, (PNA) — The peso strengthened against the dollar Tuesday partly on news that Japan will increase sales tax in 2014.
It finished the day at 43.325, better by P0.215 from the 43.54 finish in the previous day.
BPI chief economist Emilio S. Neri Jr. told PNA in an interview, that news from Japan played a major part in the strengthening of Asian currencies during the day compared to the news about the US government shutdown.
“It was taken very positively by the markets despite the partial shutdown in the US,” he said.
The US government was left to run out of money until midnight of October 1, the end of the fiscal year. This shutdown is first in nearly 20 years.
Neri explained that although the impasse in the US government will possibly delay the tapering of the Federal Reserve’s US$ 85 billion stimulus program it will also dampen growth outlook for the world’s largest economy.
Thus, from a 43.55 start, which is weaker than day-ago’s 43.45, the peso surged to 43.320. The local unit’s opening level is also its weakest for the day.
Average trading level for the day stood at 43.39, also better than the 43.39 in the previous day.
Volume of trade reached US$ 804.96 million, slightly higher than the US$ 784.8 million Monday.
For Wednesday, the peso is expected to trade between 43.15 and 43.45.