THE PESO sustained its strength on Monday to hit a five-month high as the dollar weakened following dovish statements from US Federal Reserve officials.
The local unit closed yesterday’s session at P52.57 versus the greenback, up from its P52.715 finish last Friday.
This was the peso’s best showing in more than five months or since it ended at P52.49 last June 7.
The peso traded stronger the whole day, opening the session at P52.60 against the dollar. It went to as high as P52.55, while its intraday trough stood at P52.65.
Dollars traded thinned to $561.81 million from the $756.6 million that switched hands on Friday.
“The peso’s strength is due to the dollar weakening against major currencies, with the dollar-peso following suit,” a trader said in a phone interview.
Another trader said the local currency sustained its strength on the continued impact of the policy tightening of the Bangko Sentral ng Pilipinas, which raised its benchmark rates by 25 basis points last week, and amid dovish signals from the Fed.
Fed Vice Chairman Richard Clarida acknowledged signs of slowing global growth which “is going to be relevant” for the outlook on the US economy.
“The Fed has been really aggressive in its tone. They have basis for that because their economy is really doing well and they have to hike rates,” the first trader said.
“However, with the dovish statement from [Mr.] Clarida, the market really reacted to that. If we’re going to continue more of those, then I guess we will see markets further react to that.”
For Tuesday, the first trader expects the peso to trade between P52.50 and P52.80, while the other gave a P52.45-P52.65 range. — K.A.N. Vidal

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