Peso marks new four-year high; positive outlook on PH economy citedBy Michelle V. Remo
Philippine Daily Inquirer
MANILA, Philippines — The peso inched up further on Tuesday as the market continued to anticipate another round of stimulus measure by the US Federal Reserve and as investors manifested a generally positive outlook on the Philippine economy.
The local currency closed at its intraday high of 41.56 against the US dollar, thus registering a new four-year high after it did so on Monday. The latest close was up by 5.5 centavos from Monday’s close of 41.615:$1.
Intraday low settled at 41.67:$1. Volume of trade amounted to $592.8 million from $804.5 million previously.
The appreciation of the peso came as portfolio fund owners awaited an announcement by the US Federal Reserve about a potential third round of stimulus measure to boost the US economy. The market expects the US Fed to engage in another round of bond buying to help inject liquidity to the US economy.
This expectation comes as the employment situation in the United States remains problematic. With more cash in the system, the US economy is believed to have the resources needed for investment activities.
A rise in liquidity in the United States, although meant for the US economy, is seen boosting demand for emerging market assets as well. For this reason, investors snapped peso-denominated securities, traders said.
Market players also said the growth outlook for the Philippines has remained positive, thereby attracting foreign fund owners. Traders said yield-seeking investors have been going for emerging market assets given the unfavorable performance of advanced economies.
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