THE PESO continued to rally versus the greenback on Friday, as traders assess the new US Federal Reserve chair and amid growing skepticism on planned cuts for corporate taxes there.
The local currency closed at P51.21 against the dollar on Friday, gaining 21 centavos from its P51.42-per-dollar finish on Thursday.
The peso opened the session slightly stronger at P51.36 against the dollar, which was also the unit’s low for the day. It reached an intraday peak of P51.14.
Dollars traded on Friday totalled $690.2 million, up from the previous day’s $562.4 million.
Traders attributed the rally to a weaker dollar due to the appointment of Fed governor Jerome H. Powell as the new Fed chair, replacing the incumbent Janet L. Yellen who will leave her seat by February.
“The expectation on the new Fed chair took a reverse after the nomination of the dovish Powell. Two to three weeks ago, the dollar rallied as traders expect [John B.] Taylor’s nomination,” a trader said in a phone call.
A second trader, meanwhile, attributed to the peso’s uptick to “growing skepticism” as Republican lawmakers in the lower house submitted a bill cutting the corporate tax to 20% from the current 35%.
Earlier, US President Donald J. Trump said he expects the bill to be consolidated with the Senate’s, and be enacted by the end of the year.
“The corporate tax cut seemed to be negative for the market, dragging the dollar down,” the trader said.
“The stock market [on Friday] is on a buying mode after the all-time high close [on Thursday], prompting the peso to appreciate,” the trader added.
The accumulated remittances during the two-day break this week also boosted the peso, the second trader noted. – Karl Angelo N. Vidal