Philippine Peso Strengthens Against US Dollar on Improved Domestic Data and Global Risk Appetite

The Philippine peso strengthened against the US dollar due to several factors including improved domestic economic indicators such as narrower trade deficit and better manufacturing data in June compared to May.

There is anticipation of second quarter GDP figures which are expected to show a larger contraction than previously reported, potentially leading to further monetary easing measures by the central bank.

The general weakness of the US dollar on global markets also contributed to the peso's strength as risk appetite improved with positive developments regarding potential COVID-19 vaccines overshadowing concerns over rising cases in some regions.

Economic managers have revised this year’s GDP target to a contraction range of 2% to 3.4%, reflecting the impact of lockdown measures implemented earlier in the year.