THE PESO inched up versus the greenback on Wednesday on the back of market optimism over the possible partial lifting of restrictions in the United States as well as gains in the local stock market.
The local unit ended trading at P50.62 per dollar on Wednesday, appreciating by a centavo from its P50.63 close on Tuesday, according to data from the Bankers Association of the Philippines.
The peso started the day at P50.65 per dollar. Its weakest showing was at P50.67 while its strongest was at P50.60 against the greenback.
Dollars traded declined to $248.60 million on Wednesday from $340.40 million on Tuesday.
A trader said the peso’s slight gain came after positive sentiment on the back of recent developments in the US.
“The peso slightly appreciated today due to market optimism over prospects of partially re-opening the US economy from current lockdowns imposed in various states such as New York,” the trader said in an e-mail on Wednesday.
Reuters reported that 10 states including California and New York, which account for 23% of the country’s economic output, have been looking to reopen business operations temporarily halted due to the COVID-19 pandemic.
Other states including Oregon, Washington, New Jersey, Connecticut, Delaware, Pennsylvania, Rhode Island, and Massachusetts, are also eyeing to gradually open their economy and authorities from said states will make decisions based on their specific needs, according to New York Governor Andrew Cuomo.
US President Donald J. Trump has said the decision to reopen the economy remains with him. The White House is preparing its own plans which are expected to be announced soon.
However, Mr. Trump also hinted that state governors may move based on their own assessments.
“I’d rather have them make the decision,” he said in his daily news conference, Reuters reported.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the stronger peso came after gains in both the US and local stock markets.
“Peso was stronger amid continued improvement in global market risk appetite with the latest gains in the US and local stock markets to new 1-month highs,” he said in a text message.
Reuters reported that the Dow Jones Industrial Average inched up by 558.99 points or 2.39% to 23,949.76. The S&P 500 also gained 84.43 points or 3.06% to reach 2,846.06 while the Nasdaq Composite rose by 323.32 points or 3.95% to 8,515.74 on Tuesday.
At home, the Philippine Stock Exchange index increased by 165.17 points or 2.86% to 5,946.05.
The trader expects the peso to move within the P50.55 to P50.70 range today while Mr. Ricafort gave a forecast range of P50.55 to P50.70. — L.W.T. Noble with Reuters