THE peso rose for the fourth straight day against the dollar and the stock market also surged to the 6,600 level, tracking a global rally prompted by renewed optimism over the likelihood of Federal Reserve rate cuts.
The currency edged up by one and a half centavos to P58.305:$1, still its best close in over a month, while the benchmark Philippine Stock Exchange index (PSEi) added 119.89 points, or 1.85 percent, to end Thursday at 6,609.24 for a return to a level not seen since late May.
The broader All Shares index gained 1.30 percent, or 45.64 points, to 3,555.68.
The peso opened at the day’s low of P58.24:$1 and traded as high as P58.34. Volume reached P1.126 billion, slightly lower than the P1.161 billion seen on Wednesday.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the PSEi gains had lifted the peso, which could further strengthen today.
Philstocks Financial Inc. research and engagement officer Mikhail Plopenio, meanwhile, said the local stock market had joined other regional markets in cheering a possible September easing by the US central bank.
“Thursday’s rise is driven by the positive spillovers from Wall Street’s record-high performances overnight amid hopes of rate cuts by the Federal Reserve,” he added.
Fed Chairman Jerome Powell told US legislators that the US central bank would not wait until inflation hit the target of 2.0 percent before lowering interest rates, which led to the S&P 500 and Nasdaq ending at all-time highs.
Plopenio said that traders had welcomed the peso’s continued strengthening against the dollar.
“Adding to the positive factors was the inflow of foreign funds as foreigners were net buyers amounting to P69.30 million,” he continued.
China Bank Capital Corp. Managing Director Juan Paolo Colet, meanwhile, said that “trading was also buoyed by broadening consensus that the BSP (Bangko Sentral ng Pilipinas) will commence monetary policy easing in August.”
“With the PSEi closing above 6,600 on healthy volume, we may see trading momentum and positive sentiment lift the market toward the 6,700 resistance in the coming sessions,” he added.
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