THE peso continued to rally against the dollar on Friday amid lingering expectations of a rate cut by the U.S. Federal Reserve.
The local currency appreciated by 6 centavos to close at P51.13, according to data from the Bankers Association of the Philippines. It opened stronger at 51.25, posting its best intraday value of P51.08 against the dollar. It weakened during the day to as much as P51.28.
Dollars traded rose to $910.96 million from $883.31 million.
“The US dollar has slipped for a third straight day, which may have been due to the dovish comments of US Fed Chairman Jerome Powell that there is space for monetary easing,” said Ruben Carlo O. Asuncion, chief economist at Unionbank of the Philippines.
In a prepared speech to the U.S. House Financial Services Committee, Mr. Powell hinted of an interest rate cut, saying the central bank will act as appropriate to sustain expansion as trade tensions and global growth concerns weigh on the economy.
The U.S. was embroiled in a trade war with China as they imposed tariffs on each other’s imports. Tensions cooled late last month after Washington and Beijing agreed to resume negotiations.
Mr. Powell’s testimony strengthens the case of a rate cut from the Fed when its policy-making Federal Open Market Committee (FOMC) meets again later this month.
The peso is expected to continue to strengthen next week and may move between P51 and P51.30 a dollar as the Fed’s dovish stance lingers, Mr. Asuncion said. — Reicelene Joy N. Ignacio