Peso jumps to PHP 58 level on broad dollar weakness

The peso jumped on Monday to return to P58 level amid broad dollar weakness, with the yen also surging against the greenback on intervention bets.

The local unit ended at PHP 58.971 versus the dollar, strengthening by 11.9 centavos from its PHP 59.09 finish on Friday, data from the Bankers Association of the Philippines showed.

This was the peso’s strongest finish in more than three weeks or since it closed at PHP 58.841 on Jan. 2, which was also the last time it finished at the PHP 58 range.

The currency opened Monday’s trading session stronger at P58.97 against the dollar. Its intraday best was at PHP 58.92, while its worst showing was at PHP 59.048 against the greenback.

Dollars traded went down to USD 954 million from USD 1.159 billion on Friday.

The dollar was generally weaker on Monday as the yen jumped amid speculations of market intervention, a trader said by phone.

The yen jumped to more than a two-month high on Monday as speculation mounted that coordinated intervention by authorities in the US and Japan could be imminent, a prospect Tokyo’s top currency diplomat left wide open while keeping markets guessing, Reuters reported.

Investors were also trimming dollar positions ahead of a Federal Reserve meeting and possible announcement by the Trump administration of a new Fed chairman.

The yen rose as much as 1.2% to 153.89 per dollar, its strongest since November. The euro made a four-month high of USD 1.1898 and was last up 0.2% at USD 1.1855.

A source told Reuters that the New York Federal Reserve had checked dollar/yen rates with dealers, seen as a precursor to intervention, and the scramble to get out of short yen positions has the currency some 3% off Friday’s low.

Japanese Finance Minister Satsuki Katayama declined to comment on the rate checks, while top currency diplomat Atsushi Mimura said the government would maintain close coordination with the United States on foreign exchange and act appropriately.

The US dollar index, which measures the greenback’s strength against a basket of six currencies, was down 0.1% at a four-month low of 97.155.

Several other Asian currencies also strengthened, with the Korean won climbing 1.5%, the Malaysian ringgit advancing to its strongest since June 2018 and the Singapore dollar surging to its strongest in more than a decade.

The peso was also supported by signals from Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. that the local unit is unlikely to reach the P60 level versus the dollar in the near term, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Tuesday, the trader sees the peso moving between PHP 58.80 and PHP 59.10 per dollar on market positioning of market players ahead of the Fed’s policy meeting, while Mr. Ricafort expects it to range from PHP 58.85 to PHP 59.05 per dollar. — Aaron Michael C. Sy with Reuters