Peso rises on reports of US efforts to speed up growth

MANILA, Philippines—The peso inched up following a long weekend as hopes the US Federal Reserve would implement some measures to speed up growth of the US economy lifted the investment appetite of foreign fund owners.

The local currency closed at 42.28 against the US dollar on Wednesday, up by 15 centavos from Friday’s finish of 42.43:$1. The market was closed on Monday and Tuesday in observance of National Heroes’ Day and the end of Ramadan.

Intraday high hit 42.265:$1, while intraday low settled at 42.395:$1. Volume of trade amounted to $511.28 million, down from Friday’s $935.76 million.

Traders said the peso and some other Asian currencies appreciated on Wednesday following the release of the minutes of a Federal Reserve meeting showing that some Fed officials were suggesting that it implement more stimuli that would help accelerate growth of the US economy.

The Fed officials are thinking of measures on top of an earlier announcement that it would keep its policy rates at historic lows until 2013.

The US economy has been growing sluggishly after the most recent global economic turmoil despite heavy bond purchases by the US Federal Reserve under Quantitative Easing 1 and 2 (QE1 and QE2).

Last week, the Fed said QE3 would no longer be pursued, but the recent minutes of the US Fed meeting showed that officials were still thinking of ways to pump-prime the US economy.

Traders said the faster growth of the US economy would help improve investor sentiment even for developing Asian markets like the Philippines, which have been exporting to the US as their biggest market.