May 17 (Bloomberg) -- The Philippine peso rallied from a two-month low after a technical indicator suggested recent declines in regional currencies were excessive. Bonds were unchanged.
The peso has lost 1.6 percent so far this month as concern Europe’s debt crisis is worsening deterred investors from buying emerging-market assets. The Bloomberg-JPMorgan Asia Dollar Index’s 14-day relative strength indicator, which measures the momentum of changes, was below 30 in the past three days. A level below 30 or above 70 suggests a currency may reverse direction.
“It’s a technical bounce in favor of the regional currencies,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila. “That doesn’t mean the market has digested the uncertainty in the euro zone, particularly Greece. In the next few weeks, the 43.50 peso level might be tested.”
The peso climbed 0.3 percent to 42.915 per dollar in Manila, according to Tullett Prebon Plc. The currency touched 43.08 yesterday, the weakest level since March 23. One-month implied volatility, which measures exchange-rate swings used to price options, fell 25 basis points to 6.5 percent. The Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, gained 0.1 percent today.
Philippine Economic Planning Secretary Arsenio Balisacan said today this year’s growth target of 5 percent to 6 percent is “doable”, citing infrastructure as the growth driver.
A second election in less than two months threatens to extend the political deadlock that has left Greece without a government since the last vote on May 6.
The yield on the Philippines’ 5.875 percent bonds due March 2032 was unchanged at 5.97 percent, according to prices from Tradition Financial Services.
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