Peso climbs to 2-month high of P46.14 per dollar

The peso climbed to a two-month high against the US dollar Wednesday, gaining P0.33 in a single day as investors anticipate a US interest rate hike will no longer happen this year.

The peso closed at 46.14 against the greenback, up from 46.47 on Tuesday. It was the local currency’s strongest level since closing at 45.93 on Aug. 11 this year.

Total volume turnover reached $1.243 billion Wednesday, higher than $1.109 billion recorded on Tuesday.

“The peso’s appreciation was in line with the rest of the currencies in the region… Most investors do not anticipate the US Fed to hike interest rates this year,” Nicholas Antonio Mapa, research officer of the Bank of the Philippine Islands’ global markets and treasury division, told the Standard in a phone interview.

Mapa, however, said he was not sure if the peso’s strength would continue in the coming days. “Let’s see if the momentum will be sustained,” he said.

Mapa earlier said the US dollar was on a retreat mode this week, as the Fed was seen to postpone its rate hike to 2016 after a string of “disappointing” economic data.

US data showed that businesses created only 142,000 jobs in September, or about 64,000 fewer than what most analysts expected.

The US Labor Department also reported that employers kept average pay rises at zero and thousands of workers quit the labor market, taking the participation rate back to levels last seen in the 1970s.

The peso posted its weakest level this year at 46.93 against the dollar on Sept. 29 at the height of uncertainties in the global financial markets triggered by speculations on the pacing and timing of the US Fed rate hike.

Bangko Sentral ng Pilipinas earlier ruled out the possibility of a peso devaluation, saying the country’s macroeconomic fundamentals remained strong.

Bangko Sentral Deputy Governor Diwa Guinigundo said the Philippines, from a macroeconomic standpoint, enjoyed resilient domestic factors including consumption, private capital formation and public spending.

Guinigundo also expressed optimism that the exchange rate target average of 43 to 46 against the dollar this year remained doable despite the volatilities in the global financial markets.

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