Peso rebounds vs dollar

THE PESO closed stronger against the dollar yesterday as investors adjusted their positions ahead of a closely watched speech by US Federal Reserve Chairwoman Janet L. Yellen later this week.

The local currency was changing hands at P46.46 versus the dollar, gaining 12 centavos compared to its previous finish of P46.58 against the foreign unit.

The peso was traded stronger the entire session, starting the day at P46.50 versus the greenback, and dropping to as low as P46.575 per dollar during yesterday’s trade. Its strongest point was logged at P46.45 against the foreign currency.

Trading volume increased to $440.35 million from the previous day’s $406 million, data from the Philippine Dealing System showed.

“Investors were sitting on their hands ahead of [ Ms.] Yellen’s speech at the central bank’s annual symposium in Jackson Hole, Wyoming on Friday with others adjusting their positions as they await for clues on the timing of the US central bank’s next rate hike,” a trader said via phone yesterday.

“There was lack of clear direction so the currencies traded in a tight range, as investors cautiously await the speech. I think investors will make major moves after the Jackson Hole [speech],” the trader added.

Another trader said: “The peso moved sideways as investors waited on the sidelines ahead of [Ms.] Yellen’s speech.”

CONSENSUS

There was growing consensus from other US central bankers supporting a rate increase in the world’s largest economy soon. Federal Reserve Vice Chairman Stanley Fischer raised concerns over the weekend about the US economy’s longer-term prospects, but he was more optimistic about the economy’s short-term outlook.

He specifically said inflation is within “hailing distance” of the Fed’s 2% target, while he expected economic growth to “pick up” in the coming quarters.

Late last week, San Francisco Federal Reserve Bank President John C. Williams expressed his support last week to growing sentiment from other Fed officials supporting an interest rate hike in coming months, warning that “waiting too long could be costly for the economy.”

For today, a bank trader said “the peso might remain relatively strong amid bets of weaker US housing data.”

The dollar- peso pair is seen moving within the P46.40 to P46.60 range today, traders said. •