THE PESO rallied against the greenback on Wednesday to close at its strongest in more than two years following gains in the stock market as well as market optimism on the gradual reopening of economies across the world.
The local unit finished trading at P50.10 per dollar on Wednesday, rising by 24 centavos from its P50.34 close on Tuesday, according to data from the Bankers Association of the Philippines.
The peso opened the session stronger at P50.18 per dollar. Its weakest was at P50.23 while its intraday best was at its close of P50.10 against the greenback.
Dollars traded however dropped to $855.72 million from the $877.10 million seen on Tuesday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso’s appreciation came amid gains in the local stock market. He noted that the local unit’s close on Wednesday was its strongest since the P49.82 finish recorded last Jan. 4, 2018.
“Continued gains in the local stock market today, highest in nearly three months, supported the appreciating trend of the peso,” Mr. Ricafort said in a text message.
The Philippine Stock Exchange index closed at 6,245.65 on Wednesday, gaining 220.48 points or 3.65% from the previous close. All indices also saw gains during the day.
Meanwhile, a trader attributed the peso’s strength to better risk appetite as more economies reopened.
“The peso appreciated anew from appetite for riskier currencies improved amid optimism from various economic reopening efforts locally and abroad,” he said in an e-mail.
More countries are lifting restrictions meant to curb the virus spread, according to Reuters. In Dubai, malls and private businesses fully started operations on Wednesday, a glimmer of hope for an economy that relies heavily on retail, tourism, and hospitality.
In Europe, France has started to allow restaurants, bars and cafes to reopen starting June 2, though tighter restrictions are in place in Paris.
For today, Mr. Ricafort gave a forecast range of P50 to P50.25 versus the dollar, while the trader sees the peso moving between the P50.10 to P50.30 levels. — L.W.T. Noble with Reuters