Peso up on Fitch upgrade
THE PESO strengthened against the dollar on Monday following the upgrade given by Fitch Ratings to the Philippines.
The local currency ended yesterday’s session at P50.36, 14 centavos stronger than its P50.50-per-dollar finish on Friday.
The peso opened stronger at P50.42 against the greenback, bolstered by the Fitch announcement on the credit rating upgrade. Its lowest point for the session was just at P50.45, while it reached an intraday high of P50.30 versus the dollar.
Dollars traded, however, dipped to $509 million from the $703.1 million that changed hands in the previous session.
Traders said the credit rating upgrade boosted the peso amid the dollar’s strong performance versus most currencies.
“Despite broad-based dollar gains, we’re seeing the peso to improve probably because of the Fitch upgrade. The upgrade will definitely give a slight boost to Philippine assets and the peso, I think, was one of those beneficiaries,” a trader said in a phone interview.
The Philippines bagged an upgrade from Fitch on the back of continued economic growth, supported by optimism towards infrastructure and tax reform plans.
The international debt watcher raised the country’s long-term issuer rating by one notch to “BBB” with a “stable” outlook, it said in a statement. This is one notch above minimum investment grade and matches the ratings earlier given by Moody’s Investors Service and S&P Global Ratings.
Fitch had pegged the Philippines’ ratings at “BBB-” with “positive” outlook since September 2015.
Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, said the credit rating upgrade from the debt watcher is a manifestation of the country’s stable and growing economy.
“It also illustrates that investors have been truly cancelling out the political noise coming out every day of the Philippines,” Mr. Asuncion added.
For today, a trader expects the peso to move around the P50.20 to P50.50 range, while another trader gave a slimmer range of P50.24 to P50.46.
“There are conflicting factors on the dollar-peso. It’s not a clear trend. The global scenario is that the dollar is strengthening across the board, but the peso is being buoyed by the local factors,” the first trader noted. — K.A.N. Vidal
