THE PESO strengthened against the greenback on Tuesday on positive market sentiment due to prospects of a vaccine that could help prevent further spread of the virus.
The local unit finished trading at P50.70 against the dollar on Tuesday, rising by 20 centavos from its P50.90 close on Monday, according to data from the Bankers Association of the Philippines.
The peso started the session at P50.82 per dollar. Its weakest showing for the day was at P50.83 while its strongest was at its close of P50.70 against the greenback.
Dollars traded dropped to $567.8 million from the $888.2 million logged on Monday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the peso’s gain to improved risk appetite after leads on a possible vaccine for the coronavirus disease 2019 (COVID-19).
“The peso closed stronger amid market optimism worldwide about the development of a possible vaccine (Moderna, Inc.),” Mr. Ricafort said in a text message.
Reuters reported that data released by biotech firm Moderna showed their experimental vaccine developed in the US was able to produce antibodies in a small group of healthy volunteers.
Overall, the study showed the vaccine was safe for all of the eight study participants. The said vaccine is among the 100 currently being developed to protect people from the virus that has already sickened 4.7 million people and killed over 317,000 globally.
Aside from developments on the vaccine, the stronger peso also came following remarks from the US Federal Reserve chief.
“The peso appreciated from profit taking amid positive developments on a possible vaccine by a US company and after [US] Federal Reserve Chairman Jerome J. Powell assured that the US central bank has still more room for monetary policy support,” a trader said in an e-mail.
Bloomberg reported that Mr. Powell stressed that the central bank has yet to exhaust its options in supporting the economy.
“There’s a lot more we can do. We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot,” he said.
For today, Mr. Ricafort gave a forecast range of P50.55 to P50.85 while the trader expects the local unit to trade between the P50.55 to P50.75 levels. — L.W.T. Noble