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Peso climbs vs dollar

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THE PESO strengthened on Thursday as the greenback slid against major and Asian currencies following the dovish speech of US Federal Reserve Chair Jerome Powell.

The local unit ended the week at P52.45 versus the dollar, stronger than the P52.585-per-dollar finish last Wednesday.

The peso traded stronger the whole day, opening the session at P52.47 against the dollar. It climbed to as high as P52.29 and logged an intraday trough of P52.48.

Trading volume climbed to $1.161 billion from the $1.053 billion tallied the previous day.

Foreign exchange traders interviewed yesterday said the peso climbed against the dollar following Mr. Powell’s speech.

“The peso strengthened further following a dovish remark from Federal Reserve chairman Jerome Powell that US policy rates might be closer towards the neutral rate, which is suggestive of possible fewer US rate hikes for next year,” a trader said

“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth,” Mr. Powell told the Economic Club of New York.

“What we heard from Powell was quite different from his speech last Oct. 3 wherein he said that the Fed was ‘far from neutral,’” another trader said. “After his speech, the market reaction pushed the dollar lower versus major currencies and even Asian currencies.”

The second trader also speculated that the Bangko Sentral ng Pilipinas offered huge bids in the afternoon session that pushed the closing rate near the intraday low.

Markets are closed today in commemoration of the Bonifacio Day. — Karl Angelo N. Vidal