THE PESO strengthened against the dollar on Wednesday as the United States government continues talks on a fresh stimulus to boost activity in the world’s largest economy amid the ongoing coronavirus pandemic.

The local unit closed at P48.585 versus the dollar on Wednesday, rising by 3.5 centavos from its P48.62 finish on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened Wednesday’s session at P48.53 against the dollar, which was also its intraday best. Meanwhile, its weakest showing was at P48.625 versus the greenback.

Dollars traded declined to $710.70 million on Wednesday from the $869.33 million that changed hands on Tuesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso climbed versus the dollar amid anticipation that the US government will soon agree on a stimulus.

“Peso was stronger as US House Speaker Nancy Pelosi is still hopeful for a deal this week for a stimulus package before the November 3 presidential elections,” Mr. Ricafort said in a text message.

The White House and Democrats in the US Congress moved closer to agreement on a new coronavirus relief package on Tuesday as US President Donald J. Trump said he was willing to accept a large aid bill despite opposition from his own Republican Party, Reuters reported.

With just two weeks until the US presidential election, Mr. Trump signaled a willingness to go along with more than $2.2 trillion in new COVID-19 relief, a figure Democrats have been pushing for months.

Senate Majority Leader Mitch McConnell, a Republican, publicly said he would bring up a deal if one is reached by Treasury Secretary Steven Mnuchin and Democratic House Speaker Nancy Pelosi and approved by the House of Representatives.

But he provided no timetable and privately has told his fellow Republicans that he did not favor a deal before the Nov. 3 presidential and congressional elections, a senior Senate Republican aide told Reuters.

Holding a vote on a costly new package of aid could prove politically difficult for some Senate Republicans running for reelection in conservative states.

The dollar fell to a one-month low on Wednesday after Mr. Trump boosted hopes for a large fiscal stimulus package, prompting a wave of market optimism that saw traders ramp up their bets on riskier currencies.

“All in all, the chances of a stimulus bill being passed still look rather thin and we doubt investors have high expectations in these terms,” ING strategists wrote in a note to clients.

At 0710 GMT, the dollar was down 0.3% against a basket of currencies, at 92.801.

A trader said the peso rose on expectations that Ms. Pelosi will accept a compromise on the stimulus before the US presidential elections.

For today, Mr. Ricafort expects the peso to move from P48.50 to P48.65 versus the dollar, while the trader sees it ranging from P48.50 to P48.70. — KKTJ with Reuters