THE PESO rebounded against the greenback on Wednesday as discussions began on the next phase of relief measures in the United States.
The local unit ended trading at P49.375 per dollar on Wednesday, appreciating by 1.50 centavos from the P49.39 close on Tuesday, data from the Bankers Association of the Philippines showed.
The peso opened Wednesday’s session at P49.30 versus the dollar. Its weakest showing was at P49.38 while its intraday best was at P49.295 against the greenback.
Dollars traded decreased to $567.13 million from the $676.25 million recorded on Tuesday.
Sentiment on the peso improved slightly as discussions on a new US stimulus package started, a trader said.
“The peso strengthened amid lingering market views of a US stimulus package worth $1-trillion despite comments from US Senate Majority Leader Mitch McConnell about a possible delay in its passage,” the trader said in an e-mail.
Reuters reported Republicans and Democrats had different views on how much to spend for the next round of relief measures in their discussions on the extension of unemployment insurance for laid off Americans and additional aid for schools.
The proposed $1-trillion package is not enough, said House Speaker Nancy Pelosi. The Democratic-run House of Representatives passed a $3-trillion relief bill two months ago that was ignored in the Republican-majority Senate.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the local unit’s gains to the retail Treasury bond (RTB) sale.
“Large amount of RTB raised lately could have entailed some foreign buying, partly supporting the peso recently,” he said in a text message.
The Bureau of the Treasury said on Tuesday it has sold more than P250 billion in five-year RTB bonds four days into the offer period.
This is beyond the P192.71 billion raised at the rate-setting auction on Thursday and also the P250 billion in new money raised from the February RTB offer, said National Treasurer Rosalia V. de Leon.
The RTBs carry a coupon rate of 2.625%. The offer period will run until Aug. 7, unless closed earlier.
For today, the trader gave a forecast range of P49.30 to P49.50 per dollar, while Mr. Ricafort expects the currency to move between the P49.30 to P49.45 band. — LWTN with Reuters