THE PESO strengthened against the greenback on Monday to log its best close since November 2016 on prospects of a new stimulus package in the United States.

The local unit closed at P49.375 per dollar on Monday, stronger by 6.5 centavos from its P49.44 finish on Friday, data from the Bankers Association of the Philippines showed.

This is the currency’s strongest finish since its P49.35 close on Nov. 16, 2016, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

The peso opened the session at P49.45 per dollar. Its weakest was at P49.46 while its intraday best was at its close of P49.375 against the greenback. Dollars traded dropped to $492.33 million from the $687.8 million seen on Friday.

A trader said the peso was supported by risk-off sentiment following news of possible economic stimulus in the US.

“The peso strengthened amid prospects of a new US stimulus package,” he said in an email.

Reuters reported that investors are on the lookout for further fiscal support as a program that lays out additional unemployment benefits will expire by July 31. The US Congress is set to tackle another coronavirus aid package.

Meanwhile, Mr. Ricafort said Moody’s Investors Service’s affirmation of the Philippines’ credit rating last week continued to boost sentiment.

“Local financial markets including the peso continued to gain after Moody’s affirmation of the Philippine credit rating, another sign of resilience on the Philippine economic fundamentals,” he said in a text message.

On Thursday, Moody’s maintained the country’s credit rating at Baa2, a notch above the minimum investment grade. The rating was given in December 2014.

For today, the trader said the peso could move around the P49.30 to P49.50 levels versus the dollar while Mr. Ricafort expects it to trade within the P49.30 to P49.45 band. — L.W.T. Noble with Reuters