THE PESO climbed further against the dollar on Friday due to the European Central Bank’s (ECB) hawkish tone at the close of its policy meeting, and profit taking ahead of President Rodrigo R. Duterte’s second State of the Nation Address (SONA) on Monday.
The local unit closed at P50.71 against the dollar to end the week, gaining 17 centavos from its previous finish of P50.88.
The peso opened the session at P50.75 versus the foreign currency. Its weakest level for the day was at P50.81 per dollar, while its intraday high was at P50.70 against the dollar.
Dollars traded stood at $468.16 million, lower than the $557.35 million logged on Thursday.
Traders said the peso strengthened along with other regional currencies on the back of the result of the ECB meeting.
“It traded lower today, the second day that it recovered, after the ECB meeting last night. It’s kind of hawkish, so dollar weakened against all currencies, especially the euro. Regional currencies, emerging market currencies, along with dollar-peso, also traded lower,” a trader said in an phone interview on Friday.
Another trader said: “Overnightm we saw a hawkish ECB, and I think probably for the first time for the past few days, currencies have been traded lower, so the dollar-peso followed.”
Reuters reported that the ECB reaffirmed its ultra-easy policy stance on Thursday and kept the door open to boosting its bond purchases if needed, despite an upswing in the euro zone’s economy.
The ECB kept rates at record low and confirmed its asset-buying program would continue at €60 billion ($69.15 billion) per month at least until December and could be expanded or extended if deemed necessary.
Another trader attributed the rebound of the local currency to profit taking ahead of Mr. Duterte’s second SONA. “There’s a SONA on Monday, I guess also the market was positioning due to that.” — E.J.C. Tubayan