THE PESO strengthened versus the greenback on Thursday on expectations that the central bank would keep rates at record lows and ahead of the release of US jobs data.
The local unit closed at P48.735 per dollar yesterday, gaining seven centavos from its P48.805 finish on Wednesday, data from the Bankers Association of the Philippines showed.
The peso started Thursday’s trading at P48.755 versus the dollar. Its weakest showing was at P48.92, while its intraday best was its closing level of P48.735.
Dollars exchanged decreased to $1.005 billion on Thursday from $1.103 billion on Wednesday.
The peso strengthened ahead of the close of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting on Thursday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
After the market’s close, BSP Governor Benjamin E. Diokno said in an online briefing that the Monetary Board kept the key policy rate at a record low of 2% at yesterday’s meeting to support an economy that continues to face uncertainties even while already showing early signs of recovery.
“On balance, the expected path of inflation and downside risks to domestic economic growth warrant keeping monetary policy settings unchanged,” Mr. Diokno said in an online briefing.
“The Monetary Board believes that sustained monetary policy support for domestic demand should help the economic recovery gain more traction, especially as risk aversion continues to temper credit activity despite ample liquidity in the financial system,” he added.
Meanwhile, a trader said the peso climbed as investors expect improvement in the US labor market. Initial jobless claims data were scheduled to be reported by the US Labor Department on Thursday.
For Friday, Mr. Ricafort gave a forecast range of P48.65 to P48.85 per dollar, while the trader expects the local unit to move within the P48.70 to P48.85 band. — L.W.T. Noble