MANILA -- Expectations of another cut in Federal Reserve’s key rates after its October 29-30 meeting lifted the Philippine peso anew Wednesday while the risk-on sentiment also boosted the main equities index.
The local currency finished the day at 50.885 from 51.09, which Rizal Commercial Banking Corporation (RCBC) lead economist Michael Ricafort said is a 21-month high after the local unit’s 50.84 close in January 26 last year.
He attributed the peso’s strength to the widely expected decision by the Federal Reserve on October 30 to cut its key short-term interest rates, leading to some decline in the US dollar against major Asian/global currencies especially since the start of the week.
Ricafort also said the US dollar weakened against other currencies due to improved global risk appetite that resulted in gains in some emerging market currencies and stock markets recently.
This amid the “continued progress on the US-China trade talks towards a phase one trade deal/agreement by November 2019 that are ahead of schedule and positive developments on Brexit”, he added.
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Another reason for the peso’s strength is the seasonal hike in remittances from overseas Filipino workers (OFW) during the holidays.
With these factors, the local currency opened the day at 51.07, little changed from the 51.08 start in the previous session.
It traded between 51.09 and 50.885, resulting in an average of 51.033.
Trading volume totaled to USD1.05 billion, higher than the USD1.04 billion a day ago.
The Philippine Stock Exchange index (PSEi) ended the day’s trade up by 0.36 percent, or 28.87 points, to 8,020.06 points.
All Shares gained 0.29 percent, or 13.94 points, to 4,801.11 points.
It was a balance among the sectors after Financials, Property, and Holding Firms rose by 1.50 percent, 0.44 percent, and 0.07 percent,
Services fell 0.70 percent, Mining and Oil, 0.46 percent; and Industrial, 0.13 percent.
Volume reached 1.23 billion shares amounting to PHP5.99 billion.
Gainers led losers at 90 to 80, while 54 shares were unchanged.
Ricafort further said the main index hit the 8,000-level, near a three-month high, partly due to foreign buying brought about by its
latest rally. (PNA)