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Despite the higher-than-expected September inflation rate in the United States, the main equity index and the peso ended the week in the black.

To reach 5,904.75 points, the Philippine Stock Exchange index (PSEi) increased by 0.15 percent or 9.11 points.

With a gain of 0.41 percent or 12.99 points, All Shares fell behind at 3,177.74 points.

The majority of the sectoral gauges, including Property (1.85%), Mining and Oil (1.53%), Financials (0.86%), and Industrial (0.16%), followed the main index.

On the other hand, services and Holding Firms saw declines of 1.18 and 0.53 percent, respectively.

With 443.29 million shares changing hands for PHP4.65 billion, volume is still minimal.

At 115 to 70, more shares advanced than fell, while 40 were unchanged.

The head of sales for Regina Capital Development Corporation (RCDC), Luis Limlingan, stated that “despite the hotter-than-expected US September inflation reading, Philippine equities managed to close with modest gains.”

In contrast to Dow Jones’ forecast of 0.3 percent, Limlingan said the price hikes increased by 0.4 percent month over month.

The local currency ended the day’s trading at 58.935 after concluding the previous session at its all-time low of 59.00 to the dollar, the third time it has done so.

It started the day downward from Thursday’s 58.9 started at 58.97.

It fluctuated between 58.88 and 58.985, with an average price of 58.931.

Volume increased to USD542.8 million from USD524.08 million the day before.

According to Michael Ricafort, chief economist of Rizal Commercial Banking Corporation (RCBC), the local currency recovered following a two-day decline due to the US dollar’s correction, which he attributed to the higher-than-anticipated 8.2 percent September inflation rate in the US.

According to him, despite a slowdown from the previous month’s 8.3 percent, the most recent inflation reading in the US is still among the highest since January 1982, or more than 40 years ago.

The BSP (Bangko Sentral ng Pilipinas) Governor (Felipe) Medalla signaled a potentially large local policy rate hike of +0.50 or +0.75 on the next rate-setting meeting on November 17, 2022 to lessen the pressure on the peso and also cool inflation as this could impact on economic recovery, the report continued. “However, the US dollar/peso exchange rate continued to stabilize for the third straight week at below the 59.00

Medalla “also signaled a variety of measures,” according to Ricafort, including boosting rates, utilizing foreign reserves, and, if practical, engaging in some kind of international cooperation.

He claimed that the Bankers Association of the Philippines (BAP) committed to continue collaborating with the central bank to combat speculative actions to ensure orderly market operations, which gave these favorable elements an additional boost.

“The peso also gained stronger after Department of Finance Secretary (Benjamin) Diokno suggested plans by the Marcos administration to prolong the lower tariff rates on important commodities, like pig, corn, rice, and coal, through 2023,” he said.

According to him, the peso’s gain was also aided by the local stock exchange’s main index rising for the fourth day on Friday.

He continued, “Slightly slower-than-expected China inflation data and UK officials working on a reversal of UK Prime Minister Truss’ tax-cut plan also bolster the global market sentiment.”

According to Ricafort, the local currency has lost 15.6 percent, or around PHP7.936, in value against the US dollar since closing at PHP50.999 at the end of 2021.

According to him, the peso’s immediate resistance level is at 59.00, while its immediate support is from 58.50 to 58.75.

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