THE PESO rebounded against the dollar on Tuesday to a fresh eight-month high amid increased risk appetite from investors following the US central bank’s reassurance that it will be patient in hiking interest rates this year.
The local unit ended yesterday’s session at P52.03 versus the greenback, 23 centavos stronger than the P52.26-per-dollar finish last Monday. This is a fresh high for the peso, being its strongest finish since May 10, when it closed at P51.80 to the dollar.
The peso traded stronger the whole day, opening the session at its intraday trough of P52.17 per greenback. Meanwhile, its best showing stood at its closing rate.
A foreign exchange trader said in an e-mail that the peso gained amid risk-on sentiment following the interview with US Federal Reserve Vice Chairman Richard Clarida.
In an interview with Fox Business Channel, Mr. Clarida echoed the mantra of the Fed, saying it will take a “patient” approach to its interest rate hike cycle given that there is a “good momentum” in the American economy amid slowdown abroad, Reuters reported.
“Reduced odds of Fed rate hikes amid reiteration of dovish statements by the Federal Reserve and its officials have partly led to lower US dollar vs. major global currencies,” Rizal Commercial Banking Corp. economist Michael L. Ricafort said in a text message.
He added that the local unit strengthened to a new peak amid continued net foreign buying at the local stock market.
“Net foreign portfolio investment inflows since the start of 2019 also partly led to lower local interest rates, including the recent decline in short-term yields, amid easing trend in inflation,” Mr. Ricafort said.
For today, Mr. Ricafort expects the peso to trade between P51.80 and P52.10, while the trader gave a P51.95-P52.15 range.
“The peso might appreciate further following the release of upbeat [Philippine] remittances data for November,” the trader noted. — K.A.N. Vidal