PESO continued strengthens against the dollar Among fewer signals on Thursday Aggressive tightening by the US Federal Reserve and data showing the Philippines net “hot money” entered in October.
The local unit closed at P56.78 per dollar on Thursday, gaining 16 centavos from P56.94 on Wednesday, according to data from the Bankers Association of the Philippines.
The peso opened Thursday’s session at P56.88 per dollar, its weakest ever. Meanwhile, its intraday high was at P55.79 against the dollar.
Dollars exchanged rose from $687.85 million on Wednesday to $870.5 million on Thursday.
“The peso appreciated significantly after the Fed minutes He said that the central bank of the United Statesficials may need additional but more modest rate hikes in future meetings,” the trader said in an email.
Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., also said the local currency strengthened amid the Fed’s guidance on smaller interest rate hikes.
Minutes of the Fed’s policy meeting this month, where it introduced its fourth consecutive 75 basis point (bp) hike, showed that a “substantial majority” of policymakers agreed that it would be appropriate to look at smaller increases soon.
In the fight against inflation, the US central bank has increased the interest rates by 375 bps since March, bringing the interest rate of federal funds to the range of 3.75-4%. Its next meeting will be held on December 13-14.
The peso is also supported by strong hot money data, Mr. Ricafort added.
Foreign portfolio investments have generated net incomefl83 million dollars worth of wealth in October, based on data released by the Bangko Sentral ng Pilipinas (BSP) on Thursday.
That was an improvement from net income of $367.3 millionflow recorded in September and a net output of $221.11 million in the same month a year ago.
On Friday, both the trader and Mr. Ricafort said the peso could move between P56.70 and P56.90 against the dollar. — Luisa Maria Jacinta J. Jocson