Peso rises on news of extended stimulus by US Federal Reserve
MANILA, Philippines—The peso climbed on Tuesday amid speculations that the US Federal Reserve would continue with its stimulus program for an extended period.
The local currency closed at 40.735 against the US dollar, up by 17.5 centavos from the previous day’s finish of 40.91:$1.
Intraday high hit 40.71:$1, while intraday low settled at 40.91:$1.
Volume of trade reached $1.16 billion from $1.2 billion previously.
Traders said some fund owners have been expecting the US Fed to continue with its third round of stimulus through bond purchases, called quantitative easing 3 (QE3), beyond this year. An extended period of stimulus is expected to boost global liquidity, some of which are believed to go to emerging markets like the Philippines in the form of portfolio investments.
A rise in inflow of foreign capital to the Philippines is seen to boost the peso and yields of peso-denominated securities. As such, yield-seeking investors were urged to take advantage of the potential income opportunity by purchasing pesos and peso-denominated assets.
The rise of the peso on Tuesday came with the increase in the Philippine Stock Exchange Index. The PSEi rose by 42.31 points to 6,234.73.
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94