Peso strengthens on Fed easing view

The peso appreciated against the dollar on Thursday amid growing expectations of a rate cut by the US Federal Reserve next month.

The local unit rose by eight centavos to close at PHP 58.76 per dollar from its PHP 58.84 finish on Wednesday, Bankers Association of the Philippines data showed.

The peso opened Thursday’s session stronger at PHP 58.75 against the greenback. Its intraday best was at PHP 58.73, while its worst showing was at PHP 58.835 versus the dollar.

Dollars traded increased to USD 1.08 billion from USD 944 million on Wednesday.

The dollar was generally weaker on Thursday amid bolstered expectations of a rate cut, “following reports that White House National Economic Council Director Kevin Hassett, who is known as pro-Fed rate cuts, emerged as the frontrunner to become the next Fed chair,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Mr. Hassett, a former Fed senior economist, is deemed close to US President Donald J. Trump’s administration, Reuters reported. Both favor a faster reduction in interest rates. Bets on Mr. Hassett replacing Jerome H. Powell when his Fed chairmanship ends in May climbed this week after a Bloomberg news report.

The peso was also supported by S&P Global Ratings’ move to affirm the Philippines’ investment-grade rating, Mr. Ricafort added.

On Thursday, S&P affirmed its “BBB+” long-term sovereign credit rating for the country and its “positive” outlook.

It said that while the slowdown in public investment due to the flood-control probe has affected economic growth, they expect the impact to be temporary as long-term prospects remain “healthy.”

For Friday, Mr. Ricafort sees the peso ranging from PHP 58.65 to PHP 58.90 per dollar. — A.M.C. Sy