THE PESO strengthened further against the dollar on Wednesday as investors continued to price in expectations of a dovish US Federal Reserve as its latest policy review concludes.
The local unit ended the session at P52.345 versus the greenback yesterday, 8.5 centavos stronger than the P52.43-per-dollar finish last Tuesday.
The peso opened the session at its intraday low of P52.43 versus the dollar. Meanwhile, its best showing for the day stood at P52.31 per US currency.
Dollars traded slid slightly to $933.32 million from the $939.03 million that switched hands the previous day.
A foreign exchange trader said the peso traded stronger as the dollar remained weak for most of the day.
“The overall tone in the market is to sell dollars. Offshore, we also saw heavy selling in favor of the peso,” the trader said in a phone interview.
However, the trader noted that the peso traded mostly between P52.34 and P52.36 versus the dollar, suspecting that there was an “intervention” as agent banks were buying within the tight range.
Meanwhile, another trader said the peso strengthened as the Fed held its first policy meeting of the year.
The central bank is expected to keep its benchmark rates steady during the two-day meeting of its policy-setting Federal Open Market Committee.
The Fed previously hinted that it will tighten its interest rates by two times this year. However, some officials said the central bank will take its time in raising borrowing costs as it will gauge the economy’s performance.
For today, the traders expect the peso to trade between P52.25 and P52.45.
“So far, we’re seeing offshore selling. If this persists overnight, we can expect the peso to open the session stronger [today],” the first trader noted. — Karl Angelo N. Vidal