Peso seen to climb further vs dollar

THE PESO may strengthen further against the dollar this week as the market expects smaller rate increases from both the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

The local currency closed at P54.71 versus the greenback on Friday, rising by 15 centavos from Thursday’s P54.86 finish, Bankers Association of the Philippines data showed.

Week on week, the peso climbed by 46 centavos from its P55.17 finish on March 10.

The peso opened Friday’s session at P54.75 per dollar, which was also its worst showing for the day. Meanwhile, its intraday best was at P54.61 versus the greenback.

Dollars traded went up to $880 million on Friday from the $799 million recorded on Thursday.

The peso strengthened on Friday “after the latest upward correction in the local and US stock markets,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Wall Street rose after US banks said they were contributing about $30 billion in deposits to First Republic Bank, Mr. Ricafort said.

The Dow Jones Industrial Average fell 384.57 points or 1.19% to 31,861.98; the S&P 500 lost 43.64 points or 1.10% to 3,916.64; and the Nasdaq Composite dropped 86.76 points or 0.74% to 11,630.51, Reuters reported.

Mr. Ricafort added that latest US labor data also boosted the peso, as it could support a 25-basis-point (bp) rate hike by the Fed at its March 21-22 meeting.

Initial claims for state unemployment benefits decreased 20,000 to a seasonally adjusted 192,000 for the week ended March 11, the US Labor department said. The drop was the largest since July.

The US central bank hiked its target interest rate by 25 bps at its Jan. 31 to Feb. 1 meeting to a range between 4.5% and 4.75%.

Since March 2022, the Fed has raised rates by a total of 450 bps.

For this week, Mr. Ricafort said the policy decisions of the Fed and the BSP will dictate peso-dollar trading this week.

He said both central banks are expected to increase rates by 25 bps.

“Many will…

Neil

2023-03-19 09:00:26

All news and articles are copyrighted to the respective authors and/or News Broadcasters. VIXC.Com is an independent Online News Aggregator


Read more from original source here…