MANILA, Philippines -- The peso closed 36 centavos stronger on Wednesday at the back of an improving risk appetite among investors, who saw income-generating potentials in investing domestically.
The local currency ended Wednesday's trading at 46.03 against the 46.39 registered on Tuesday. The appreciation, however, came with a drop in the volume of trade, which amounted to $835.13 million, down from the previous day's $1.075 billion.
Some traders said the peso would likely remain within the 46-to-a-dollar level, as sentiment on emerging markets like the Philippines stayed favorable.
Others, however, said the slight appreciation of the peso on Wednesday was also a doing of the dollar's weakening given challenges to US economic recovery efforts.
Jonathan Ravelas, market strategist at Banco de Oro, meanwhile, said he was expecting the local currency to trade anywhere between 46 and 46.30 in the next week or two.
The Bangko Sentral ng Pilipinas has reinforced market projections, saying that the peso would likely sustain this year the strength it showed since the latter part of 2009 with the rise in inflows of foreign capital to the Philippines and other emerging economies.
The BSP said it would continue to observe the policy of allowing a market-determined exchange rate, but it would intervene in the foreign exchange market from time to time in the event of a sharp volatility of the local currency.