THE PESO rallied versus the greenback on Wednesday on the back of positive market sentiment due to the credit rating outlook upgrade for the country and as investors took in positive remarks from the US Federal Reserve.

The local unit finished trading at P50.57 versus the dollar yesterday, strengthening by 12.50 centavos from its P50.695-to-a-dollar close on Tuesday.

The peso opened Wednesday’s session at P50.54 versus the dollar. Its weakest showing was at P50.605, while its strongest intraday level was seen at P50.52 against the greenback.

Dollars traded climbed to $813.67 million from $662.5 million on Tuesday.

Traders attributed the peso’s strong finish to market sentiment after Fitch Ratings upgraded its rating outlook for the country.

“The outlook for the credit rating was upgraded from ‘stable’ to ‘positive.’ So that was the main driver why the peso broke the P50.70 support,” a trader said in a phone call.

On Tuesday, Fitch upgraded the country’s rating outlook to positive, indicating that its rating could be maintained or upgraded.

The global ratings agency also affirmed its credit rating for the Philippines at “BBB,” a notch above the minimum investment grade.

Meanwhile, another trader said the positive sentiment coming from the US Federal Reserve boosted support for the peso.

“The peso appreciated from market optimism after Fed Chair [Jerome] Powell gave upbeat remarks about the US economy despite the headwinds from the novel coronavirus,” he said in an e-mail.

For today, the first trader expects peso to play around the P50.45-P50.65 band, while the second trader gave a forecast range of P50.50 to P50.70. — LWTN with Reuters

RELATED ARTICLESMORE FROM AUTHOR