Peso inches up on Fitch move

THE PESO strengthened against the dollar on Tuesday after Fitch Ratings affirmed its “BBB” rating for the Philippines and revised its outlook to stable from negative.

The local currency closed at P55.725 versus the dollar on Tuesday, appreciating by 9.5 centavos from Monday’s P55.82 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Tuesday’s session at P55.70 per dollar. Its worst showing for the day was at P55.75, while its intraday best was at P55.57 versus the greenback.

Dollars traded rose to $1.19 billion on Tuesday from the $981.5 million recorded on Monday.

The peso went up after Fitch raised its outlook for the Philippines, a trader said in an e-mail.

“The continued and consistent affirmation of the country’s credit ratings for the third straight year despite the pandemic by the other major global credit rating agencies… are signs of resilience and improved international investor confidence in the Philippines,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Fitch on Monday affirmed the country’s rating and raised its outlook amid its confidence in the economy’s continued recovery from the coronavirus pandemic.

The debt watcher had downgraded the Philippines’ rating outlook to negative in July 2021 due to the pandemic’s impact on the economy.

Mr. Ricafort added that easing global crude oil prices also supported the peso.

For Wednesday, the trader said the peso could weaken anew on potentially hawkish remarks from Dallas Federal Reserve President Lorie K. Logan.

The trader expects the peso to move from P55.60 to P55.85 versus the dollar, while Mr. Ricafort sees it trading between P55.60 and P55.80. — AMCS