THE PESO strengthened against the greenback on Thursday on the back of positive market sentiment following a fresh stimulus package in the US amid the coronavirus disease 2019 (COVID-19) pandemic as well as gains in global stocks.
The local unit ended trading at P50.67 per dollar yesterday, rising 13 centavos from its P50.80 close on Wednesday, according to data from the Bankers Association of the Philippines.
The peso opened the session at P50.70 versus the dollar. Its weakest was at P50.74, while its strongest was at its close of P50.67 against the greenback.
Dollars traded went up to $290 million on Thursday from the $212.78 million on Wednesday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the currency was tracing the strength in stock markets.
“The peso closed stronger after the latest gains in the US and local stock markets,” Mr. Ricafort said in a text message.
Reuters reported on Wednesday that MSCI’s broadest index of Asia Pacific shares outside of Japan rebounded from two-week lows to inch up by 0.5% to 460.43 points.
The gains came after a strong overnight lead from Wall Street with the Dow up 2%, S&P 500 adding 2.3% and Nasdaq rising 2.8%.
Analysts said better-than-expected US corporate earnings supported equities despite continued volatility in overall sentiment due to the virus.
At home, the Philippine Stock Exchange index gained 0.46% or 25.80 points to close at 5,599.95 on Thursday.
Meanwhile, a trader said the peso was buoyed by risk-off sentiment due to expectations of the US Congress’ approval of another fiscal support package for businesses in the United States.
“The peso appreciated from market optimism after the US Congress approved a fresh stimulus package of about $500-billion intended for small businesses and medical facilities,” the trader said in an e-mail.
The US House of Representatives is expected to clear a bill providing $500 billion more in aid to help small businesses ride out the COVID-19 crisis, according to Reuters.
For today, Mr. Ricafort gave a forecast range of P50.50 to P50.80 while the trader expects the peso to move around the P50.60 to P50.80 levels. — L.W.T. Noble with Reuters