Peso inches higher against dollar amid dovish Fed hints
![Peso-dollar-currency](https://www.bworldonline.com/wp-content/uploads/2023/06/Peso-dollar-currency.jpg)
THE PESO appreciated slightly against the dollar on Wednesday amid dovish hints from a US Federal Reserve official.
The local unit closed at P55.39 per dollar on Wednesday, inching up by a centavo from its P55.40 finish on Tuesday, based on Bankers Association of the Philippines data.
The peso opened Wednesday’s session sharply stronger at P55.29 against the dollar. Its intraday best was at P55.28, while its weakest showing was at P55.40 versus the greenback.
Dollars traded went down to $1.097 billion on Wednesday from $1.24 billion on Tuesday.
The peso rose against the dollar after a Fed official hinted that they may pause at their next meeting, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The peso appreciated slightly after Fed official Waller hinted at the possibility of policy rate cuts if US inflation declined favorably toward the Fed’s 2% target,” a trader likewise said in an e-mail.
Fed Governor Christopher Waller flagged the possibility of lowering the Fed policy rate in the months ahead if inflation continues to come down. Mr. Waller also said he was “increasingly confident” the current interest rate setting would prove adequate to lower inflation to the Fed’s 2% target, Reuters reported.
The US central bank this month kept its target rate at the 5.25%-5.5% range for the second consecutive meeting.
It has hiked rates by a cumulative 525 basis points since it began its tightening cycle in March 2022.
The Fed hold its last policy meeting for this year on Dec. 12-13.
The peso was supported by a generally weaker dollar and lower US Treasury yields recently, Mr. Ricafort said.
The US dollar slid across the board to hit a more than three-month low against its major peers on Wednesday, Reuters reported.
The dollar tumbled to a more than three-month low against a basket of currencies at 102.46, as bets grow that the Federal Reserve could begin cutting rates early next year.
For Wednesday, the trader said the peso could depreciate against the dollar ahead of the US gross domestic product report.
The trader sees the peso moving between P55.30 and P55.50 per dollar, while Mr. Ricafort sees it ranging from P55.25 to P55.45. — AMCS with Reuters