BSP: Peso to average P40-P41 vs US dollar

CEBU, Philippines - Foreign exchange rate is seen to hover between P40.50 to P41 range this week, while the Bangko Sentral Ng Pilipinas (BSP) is on the bid to curb the fast appreciation of the peso versus the greenback.

Based on the “Weekly Views” and monitoring of the Metrobank Research Department released yesterday, despite the choppiness seen in the United States and Europe due to more hearsays rather than concrete action, Asia, including the Philippines remains resilient and steady showing investor bias towards the region.

Although the greenback may be heavy, central bank intervention is still apparent showing their reluctance to let their respective currencies appreciate further for the meantime.

Meanwhile, in the local market space, government securities generally saw some slow trading as volume dried up and yields mostly traded a very tight range.

According to the report, yields traded flat to marginally lower on light volume for the week, rising marginally and falling marginally.

Volume however picked up at end of of last week as some volume deals and client flows started to pour into the market but other than that there was generally a dearth o activity. Week-on-week yields fell marginally by 0.5-1 basis point.

This week, players may continue trading a tight range as they await direction.

In the stock market, moving forward this week, attention will be focused on a slew of economic reports in Europe and in Asia.

Elsewhere, US news flows due out for the week including existing home sales, new home sales, and jobless claims.

In the local side, investors will keep an eye on the BSP policy meeting this coming Thursday. Consensus sees key policy rates to be unchanged, as current stance is still deemed to be accommodative enough to spur growth in the economy.

In the week ending January 18, (20130 the bulls continue to dominate the market, with the main index breaching the 6,100 mark.

The PSE index gained 87.46 points (+1.45 percent) to finish 6,139.21. Average daily value turn-over was at P8.1 billion.

According to the report, foreigners were net buyers by P68 million. In developed markets, US equities rose higher amid encouraging corporate earnings results. (FREEMAN)