THE PESO rebounded against the dollar on Wednesday as drug firms in the United States race to launch vaccines against the coronavirus disease 2019 (COVID-19) and after US retail sales grew slower than expected in October.
The local unit closed at P48.22 against the greenback on Wednesday, rising by two centavos from its P48.24 finish on Tuesday, data from the Bankers Association of the Philippines showed.
The peso opened Wednesday’s session at P48.28 per dollar. Its weakest showing was at P48.29 against the greenback while its closing level was its intraday high.
Dollars traded declined to $635.8 million on Wednesday from $705.82 million on the previous day.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso climbed versus the dollar as investor sentiment continues to improve with the results of tests of possible COVID-19 vaccines.
Johnson & Johnson’s chief scientist said the drug maker is recruiting over 1,000 people per day for the late-stage trial of its experimental COVID-19 vaccine and expects to have all the data needed to seek US authorization by February or earlier, Reuters reported.
The Phase III trial of the single-dose vaccine started in late September. The company paused the trial in October because of a serious medical event in one participant and resumed after getting the green light from an independent safety panel.
J&J lags some of its rivals in the global race to develop a safe and effective vaccine against the virus that has killed over 1.3 million people worldwide and roiled the global economy.
Rival Moderna on Monday said its experimental vaccine was 94.5% effective in preventing COVID-19 based on interim data from a late-stage clinical trial, following similar results from Pfizer last week.
Both Pfizer’s and Moderna’s vaccines use a new technology known as messenger RNA, or mRNA. By contrast, J&J’s vaccine uses a common cold virus known as adenovirus type 26 to introduce coronavirus proteins into cells in the body and trigger the body’s immune system.
J&J’s candidate is a single-dose vaccine, whereas the vaccines from Moderna and Pfizer and another under development by AstraZeneca all require two shots separated by several weeks.
Meanwhile, a trader said the peso rose following the release of data on US retail sales showing slower-than-expected consumer spending in October.
US retail sales increased less than expected in October and could slow further, restrained by spiraling new COVID-19 infections and declining household income as millions of unemployed Americans lose government financial support, Reuters reported.
While other data on Tuesday showed production at factories accelerating last month, output remained well below its pre-pandemic level and the uncontrolled coronavirus outbreak could disrupt production. The public health crisis and frail economy are major challenges confronting President-elect Joe Biden when he takes over from US President Donald Trump in January.
Mr. Biden on Monday urged a divided Congress to come together and pass another pandemic relief package.
Retail sales rose 0.3% last month, the smallest gain since the recovery started in May, after increasing 1.6% in September, the Commerce department said. They account for the goods component of consumer spending, with services such as healthcare and hotel accommodation making up the other portion.
Sales were supported by Amazon.com’s “Prime Day” event, with online receipts surging 3.1%. “Prime Day” is normally in July and some economists said this could have thrown off the model that the government uses to strip seasonal fluctuations from the data, leading to the modest sales gain.
Consumers bought motor vehicles at a much slower pace than in previous months. There were increases in sales of electronics and appliances, as well as building materials and garden equipment. But households cut back spending on sporting goods and hobbies, clothing, furniture, drinking and dining out.
Stocks on Wall Street were mostly lower. The dollar slipped against a basket of currencies. US Treasury prices rose.
Daily new coronavirus cases have been exceeding 100,000 since early this month, pushing the number of infections in the United States above 11 million, according to a Reuters tally.
For today, Mr. Ricafort sees the peso moving from P48.16 to P48.26 versus the dollar, while the trader expects a range of P48.10 to P48.30. — KKTJ with Reuters