Peso to remain steady below 45 to dollar—report

Peso to remain steady below 45 to dollar—report

by UA&P News Desk on March 11, 2011 - 5:15 pm

From The Philippine Daily Inquirer

The peso will continue to trade below 45 to the dollar in the second quarter of 2011 as monetary authorities try to offset hikes in oil and food prices with a stronger currency, according to a local investment research group.

In its latest report on the domestic economy, First Metro Investment Corp. and UA&P Capital Markets Research (CMR) said the peso “will have an appreciation bias starting March.”

Referring to the widespread turmoil in North Africa and the Middle East, the CMR report stated that, “unlike in the past, the US dollar does not seem to be the favored ‘safe haven’ in the ongoing … crisis.”

CMR forecasts that the exchange rate will settle at 44.98 in May from 44.05 in March.

The report added that remittances from overseas Filipinos would continue to register a double-digit figure in the first quarter.

The government has started to monitor commodity prices closely, keeping an eye out for any sharp movements as commodity prices increase worldwide in part due to the so-called Middle East and North Africa (Mena) crisis.

In a report that appeared in the February issue of “Market Call,” the University of Asia and the Pacific (UA&P)said that the Philippines faces inflationary pressures over the next six months from higher oil and food prices, due to the “widening” crisis in North Africa and the Middle east.

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