THE PESO appreciated against the greenback on Tuesday on risk-on sentiment amid gains in the local stock market as well as signals of likely lower borrowings in the US.

The local unit closed at P48.053 per dollar yesterday, gaining 1.2 centavos from its P48.065 finish on Monday, data from the Bankers Association of the Philippines showed.

The peso started Tuesday’s trading session at P48.07 per dollar, which was also its weakest showing. Meanwhile, its intraday best was at P48.05 against the greenback.

Dollars exchanged slumped to $597.7 million from $787.95 billion the previous day.

The peso’s appreciation was supported by gains in the local stock market, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

The Philippine Stock Exchange index closed at 6,867.88 on Tuesday, increasing by 53.12 points or 0.78% from its Monday finish.

Meanwhile, a trader said signals of likely lower US borrowings in the first quarter also pushed up the peso.

The US Treasury said on Monday that it expects to borrow $274 billion in the first three months of this year, Reuters reported.

The department said the estimate, which was lower than the $1.127 trillion it penciled in November was due to the higher cash balance at the beginning of January.

For today, Mr. Ricafort expects the local unit to play around the P48.04 to P48.08 band while the trader gave a forecast range of P48 to P48.05. — LWTN with Reuters