THE PESO jumped back to the P56 level on Thursday as the dollar was broadly weaker on bets of monetary easing by the US Federal Reserve and as Philippine gross domestic product (GDP) growth picked up in the second quarter.
The local unit closed at P56.97 versus the dollar, appreciating by 50.5 centavos from its P57.475 finish on Wednesday, Bankers Association of the Philippines data showed.
This was its best finish in two weeks or since its P56.65 close on July 24.
The peso opened Thursday’s session stronger at P57.33 against the dollar. Its worst showing was at just P57.35, while its intraday best was at P56.97 against the greenback.
Dollars exchanged rose to $2.71 billion on Thursday from $2.49 billion on Friday.
The dollar was generally weaker on Thursday amid heightened expectations of Fed rate cuts, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The dollar-peso closed lower… on still dovish Fed bets and stronger-than-expected local GDP,” a trader said in a phone interview.
The US dollar remained lower against major peers on Thursday, with expectations of easier policy from the Federal Reserve stoked both by some disappointing macroeconomic indicators – not least Friday’s payrolls report — and US President Donald J. Trump’s move to install new picks on the Fed board that are likely to share his dovish views on monetary policy, Reuters reported.
Focus is centering on Mr. Trump’s nomination to fill a coming vacancy on the Fed’s Board of Governors and candidates for the next chair of the central bank, with current Chair Jerome H. Powell’s tenure due to end in May.
The dollar index, which gauges the currency against the euro, sterling and four other counterparts, eased 0.2% to 98.031, extending a 0.6% drop from Wednesday.
Meanwhile, the Philippine economic grew by an annual 5.5% in the April-to-June period, slightly faster than the 5.4% growth in the previous quarter. However, this was slower than the 6.5% expansion in the same quarter last year.
This matched the 5.5% median forecast in a BusinessWorld poll of 17 economists and the lower end of the government’s 5.5%-6.5% growth target for this year.
For the first half, GDP growth averaged 5.4%, slightly below the government’s goal.
For Friday, the trader sees the peso moving between P56.80 and P57.20 per dollar, while Mr. Ricafort expects it to range from P56.85 to P57.15. — Aaron Michael C. Sy with Reuters
