THE PESO strengthened versus the greenback on Thursday amid profit-taking following hawkish signals from Federal Reserve officials and softer US economic data.
The local unit closed at P52.365 per dollar on Thursday, appreciating by 12.5 centavos from its P52.49 finish on Wednesday, based on Bankers Association of the Philippines data.
The peso opened Thursday’s session at P52.40 versus the dollar. Its weakest showing was at P52.45, while its intraday best was at P52.35 against the greenback.
A trader in a Viber message said the peso closed stronger due to profit-taking following hawkish signals from Fed officials.
San Francisco Federal Reserve President Mary Daly on Wednesday said she supports a broad consensus to raise the interest rates to about 2.5% by the end of 2022, Reuters reported.
“Once accommodation is removed, we need to evaluate the effects — observe how financial conditions adjust, how much inflation recedes, and what more remains to be done to ensure a sustained expansion,” Ms. Daly said.
The Fed in March hiked rates by 25 basis points to begin its tightening cycle.
The peso also appreciated after the release of softer US home sales data, which partially led to a healthy downward correction of the dollar, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Data reported by the National Association of Realtors on Wednesday showed US existing home sales dropped 2.7% to a seasonally adjusted annual rate of 5.77 million units in March. This is the lowest level since June 2020.
Home resales, which make up the bulk of the sales, were down 4.5% annually in March.
For Friday, both Mr. Ricafort and the trader gave a forecast range of P52.25 to P52.45 per dollar. — LWTN with Reuters