Peso climbs further ahead of Fed minutes
THE PESO appreciated further against the dollar on Wednesday ahead of the release of minutes of the US Federal Reserve’s January policy meeting.
The local unit closed at P55.94 per dollar on Wednesday, strengthening by 9.5 centavos from its P56.035 finish on Tuesday, Bankers Association of the Philippines data showed.
The peso opened Wednesday’s session stronger at P55.99 against the dollar. Its weakest showing was at P56.10, while its intraday best was at P55.90 versus the greenback.
Dollars exchanged went up to $1.29 billion on Wednesday from $1.14 billion on Tuesday.
The peso gained against the dollar on Wednesday ahead of the release of minutes of the Fed’s Jan. 30-31 meeting overnight, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The US central bank held its target rate steady at the 5.25-5.5% range for a fourth straight time during its meeting last month. It raised borrowing costs by a cumulative 525 basis points from March 2022 to July 2023.
The dollar fell broadly on Wednesday as it tracked a global decline in bond yields, while traders awaited minutes of the Fed’s latest policy meeting due later in the day for further clues on the central bank’s rate outlook, Reuters reported.
The greenback slipped below 150 yen in Asia trade and last bought 149.97 yen, giving the Japanese currency some breathing space having been pinned near a three-month low in previous sessions.
In the past, traders have viewed 150 as a line in the sand that could trigger currency intervention from Japanese authorities, such as was the case in late 2022.
The move lower in the dollar has come on the back of a dip in US Treasury yields in line with its global peers.
The US dollar index fell 0.05% to 103.99.
Traders are currently pricing in just above 90 basis points worth of easing by the Fed this year.
For Thursday, Mr. Ricafort sees the peso ranging from P55.85 to P56.05 per dollar. — AMCS with Reuters