THE local currency jumped back to the P63:$1 level on Thursday while Philippine shares posted gains as investors returned to the market as the US Federal Reserve decided to keep its key rates unchanged.
The peso strengthened by 17 and a half centavos to close at P63.85 from Wednesday’s P64.025:$1.
It opened at P63.88 and ranged from P63.8 to P63.91:$1. Trading volume dropped to $1.464 billion from $1.662 billion in the previous session.
This is the second day the peso posted gains after it falling to record lows for six consecutive trading days. On Tuesday, the peso hit its lowest on record so far at P64.17 against the greenback.
Metrobank economist Nicholas Antonio Mapa said the peso strengthened after Fed kept rates untouched as expected.
The US Fed maintained its benchmark interest rate in a target range of 3.75 to 4.00 percent at its October meeting, following a quarter-point rate hike last month.
Mapa also said the government’s renewed commitment to stabilizing the currency may have helped the peso regain some ground.
“Peso could continue moderate appreciation on robust seasonal inflows associated with remittances and BPO sector,” Mapa said.
Meanwhile, Bank of the Philippine Islands lead economist Emilio Neri Jr. also said there could be some reprieve in the coming days.
“People want to stay a little bit more liquid. So maybe next week we can see,” Neri said.
The Philippine Stock Exchange index (PSEi), meanwhile, rose 52.02 points, or 0.92 percent, to close at 5,705.58. The broader All Shares index also advanced 0.38 percent.
Japhet Tantiangco, research manager at Philstocks Financial Inc., attributed the recovery to bargain hunting and positive cues from Wall Street following the Fed’s decision to maintain its policy rate range.
However, the rally came with limited trading activity, suggesting investors remained cautious.
Net value turnover reached P3.30 billion, excluding extraordinary block sales, while foreign investors recorded net selling of P100.69 million.
Luis Limlingan, Regina Capital Development Corp. head of sales, said the peso’s slight easing of losses against the US dollar also provided modest support for local equities.
The Fed’s decision offered short-term relief to Philippine stocks by easing concerns over further monetary tightening, Limlingan said.
However, persistent domestic inflation and currency pressures continued to pose risks to the market outlook.
He added that investors would likely remain cautious amid macroeconomic uncertainties and their potential effects on capital flows and corporate earnings.
Market performance was mixed across sectors as services led the gainers, climbing 1.91 percent, while mining and oil was the weakest sector, shedding 0.93 percent.
GT Capital Holdings Inc. was the index’s top gainer, rising 2.82 percent, while DigiPlus Interactive Corp. was the biggest laggard, falling 2.03 percent.
Market breadth was slightly negative, with 86 stocks advancing, 77 declining and 85 ending unchanged.
