THE PESO strengthened against the greenback on Wednesday backed by risk-on sentiment following the extension of key measures for the government’s pandemic response as well as a likely Democrat win in the Georgia senatorial runoff elections.

The local unit closed at P48.033 versus the dollar yesterday, gaining 3.2 centavos from its P48.065 finish on Tuesday, data from the Bankers Association of the Philippines showed.

The peso started trading at P48.055 per dollar on Wednesday. Its weakest showing was at P48.075 while its intraday best was at P48.03 against the greenback.

Dollars traded dropped to $488.8 million from the $586 million logged on Tuesday. 

The peso climbed versus the dollar following the extension of the validity of measures that could help push the country’s recovery, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

“The peso was strong after President [Rodrigo R.] Duterte signed into law the extension of the funds availability of the 2020 national budget and the Bayanihan 2,” Mr. Ricafort said.

Meanwhile, a trader said developments in the runoff elections in Georgia also lifted market sentiment.

“The peso appreciated amid early indications of a Democratic win in the Georgia senatorial runoffs which might pave way for more US stimulus spending under the [President Joseph R.] Biden administration,” the trader said in an email.

Projections point to the win of Democratic challenger Raphael Warnock versus incumbent Kelly Loeffler in the Senate race in Georgia, Reuters reported. About 4.5 million voters participated which is a record for a runoff election.

This Thursday, Mr. Ricafort expects the peso to move within the P48.01 to P48.06 band versus the dollar while the trader gave a forecast range of P48.00 to P48.10. — LWTN with Reuters

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