Peso climbs on easing tensions
THE PESO strengthened further against the dollar on Tuesday amid risk-on market sentiment due to subdued geopolitical noise abroad.
The peso ended the session at P53.42 versus the greenback on Tuesday, six centavos stronger than the P53.48-per-dollar finish on Monday.
The peso opened the session at its intraday low of P53.54 against the dollar. The session’s best, meanwhile, stood at P53.42 versus the greenback.
Dollars traded surged to $668.1 million from the $399.6 million that exchanged hands the previous day.
A foreign currency trader said the peso strengthened anew as the market’s risk appetite improved.
“The peso appreciated [ as] risk- on market sentiment prevailed amid optimism on corporate earnings reports,” the trader said in an e-mail.
The trader added that the peso strengthened amid lack of recent geopolitical noise, prompting the market to take profits versus the greenback.
Meanwhile, UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion said Asian markets rallied on China’s spending plan increase to help growth.
Reuters reported that China’s cabinet said the country would adopt a more “vigorous” fiscal policy to support growth amid economic headwinds.
The Chinese central bank also lent $74 billion to financial institutions through one- year medium-term lending facility to support lending.
“Domestically, the market seem unmindful of the recent House leadership change,” Mr. Asuncion added.
Pampanga Rep. Gloria Macapagal-Arroyo yesterday took over as the new speaker of the house, replacing Davao del Norte Rep. Pantaleon D. Alvarez. Prior to President Rodrigo R. Duterte’s State of the Nation Address on Monday, Ms. Arroyo walked up the Speaker’s rostrum and took an oath despite the lack of a formal vote by House members.
For Wednesday, the trader and Mr. Asuncion expect the peso to move between P53.30 and P53.50.
“The local currency is likely to continue gaining strength ahead of possible hawkish cues from European Central Bank policy meeting tomorrow that might be favorable to the euro over the dollar,” the trader noted.