Peso strengthens on Fed statement


THE PESO rebounded versus the greenback on Thursday as the US Federal Reserve expressed its commitment to retain policy support and following the extension of local restriction measures, which could hurt imports.

The local unit closed at P48.315 per dollar yesterday, strengthening by 16.2 centavos from its P48.477 finish on Wednesday, based on data from the Bankers Association of the Philippines.

The peso opened the session at P48.45 per dollar, which was also its worst showing for the day. Meanwhile, its strongest level was at P48.29 against the greenback.

Dollars exchanged slipped to $837.5 million yesterday from $854.98 million on Wednesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso was backed by the Fed’s signals of continued support for the economy via easy monetary policy.

The Fed maintained rates on Wednesday and gave a rosier outlook for economic recovery, Reuters reported. However, Fed Chairman Jerome Powell said “it is not time yet” to discuss rolling back support as the labor market is still in a dire situation.

Mr. Ricafort said the extension of the modified enhanced community quarantine also backed the peso’s appreciation on Thursday as this could affect imports.

President Rodrigo R. Duterte on Wednesday night placed Metro Manila, Bulacan, Rizal, Laguna, and Cavite under modified enhanced community quarantine (MECQ) from May 1 to 14.

Meanwhile, a trader said the peso strengthened due to profit-taking after its depreciation on Wednesday.

For today, Mr. Ricafort gave a forecast range of P48.27 to P48.37 per dollar while the trader expects the local unit to play around the P48.25 to P48.45 band. — LWTN with Reuters