THE PESO appreciated against the greenback on Monday on positive market sentiment about the possible gradual easing of lockdown measures and amid market expectations of another rate cut from the US Federal Reserve.
The local unit finished trading at P50.30 per dollar on Monday, stronger by 12 centavos from its P50.42 close on Friday, according to data from the Bankers Association of the Philippines.
The peso started the session at P50.45 per dollar, which was also its weakest showing for the day. Meanwhile, its intraday best was its close of P50.30.
Dollars traded rose to $474.22 million on Monday from the $433.2 million seen on Friday.
Improved risk appetite on the possible easing of lockdowns boosted the local unit, according to Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
“The peso was also stronger amid some optimism in the global financial markets about preparations for re-opening many economies from lockdowns, including the Philippines, in the coming days,” Mr. Ricafort said in a text message.
The government is expected to announce this Monday a decision on the enhanced community quarantine in some areas of Luzon including the National Capital Region after May 15.
Mayors of Metro Manila cities have recommended three scenarios, including the full extension of the ECQ until the end of May, a general community quarantine and a combination of ECQ and GCQ depending on the containment of the virus’ spread in their respective areas.
Meanwhile, a trader attributed the peso’s strength to market expectations of easing from the US Federal Reserve.
“The peso appreciated amid increasing expectations of future US rate cuts to negative policy rates following the spike in US unemployment data last week,” the trader said in an e-mail.
Reuters reported that the US Department of Labor said on Friday that the unemployment rate surged to 14.7%, going beyond the post-World War II record high 10.8% in November 1982.
For today, Mr. Ricafort gave a forecast range of P50.20 to P50.45 while the trader expects the local unit to move within the 50.15 and 50.35 band. — L.W.T. Noble with Reuters