The peso tested the 45:$1 level yesterday as currencies across the region strengthened following dovish comments from the US Federal Reserve.
“The strength of regional currencies, including the peso, today is a carry over momentum from the more dovish Fed comments yesterday (Wednesday in Manila),” Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said in a text message to reporters.
The peso hit an intraday high of 45.9:$1, although it closed at 46.07:$1, shedding four centavos from 46.03:$1 last Wednesday, a six-month high.
“The BSP is monitoring market price action. So far, the peso has continued to move in the middle of the pack of regional currencies, thus no need for specific action on our part at this time,” Tetangco added.
According to the Tetangco, the US Fed’s comments “fortified market views that the Fed has indeed turned more dovish than first anticipated when the Fed commenced lift off last year.”
“This seems to have indeed given the market more confidence to take on risk, as evidenced from the positive sentiment on emerging market assets/currencies today. Markets should, however, be careful not to get ahead of themselves here, as the underlying US economic trend continues to be relatively better than the rest the world,” Tetangco said in a separate text message Wednesday night.
“We don’t see any need to veer away from current monetary stance and foreign exchange policy, but we will make adjustments should such be needed to keep any build up of unwarranted market exuberance at bay,” the BSP chief added. Ben O. de Vera