Peso up as uncertainty weighs on dollar

The peso continued to climb on Thursday as the dollar remained under pressure due to concerns over the US government’s shutdown.

The local unit closed at PHP 58.08 versus the greenback, strengthening by four centavos from its PHP 58.12 finish on Wednesday, Bankers Association of the Philippines data showed.

The peso opened Thursday’s session slightly stronger at PHP 58.05 versus the dollar. It dropped to as low as PHP 58.30, while its intraday best was at PHP 58.007 against the greenback.

Dollars exchanged fell to USD 1.16 billion on Thursday from USD 1.72 billion on Wednesday.

The peso rose as the dollar was mostly weaker, with markets remaining wary about the US government’s shutdown, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The dollar-peso was steady as market players traded cautiously amid monetary developments of the US budget bill and the absence of US economic data,” a trader said in a phone interview.

For Friday, the trader expects the peso to move between PHP 57.90 and PHP 58.30 per dollar, while Mr. Ricafort sees it ranging from PHP 56.95 to PHP 58.20.

Global stocks gained on Thursday as investors digested the potential ramifications of a US government shutdown, while a weak private US labor market report bolstered bets for Federal Reserve rate cuts, Reuters reported. While US stocks have performed well, uncertainty about the credibility of US institutions more generally has manifested in a weaker dollar.

The US dollar index languished near the one-week low of 97.459 reached overnight. It last stood at 97.578, down 0.1% from Wednesday’s closing level. — AMCS with Reuters