Peso gains 19 centavos as risk-on sentiment rules

Investors adopted a risk-on sentiment Thursday lending strength to the Philippine peso and further weakening the US dollar which was already suffering from budget crisis in Washington and a possible government shutdown in the world's largest economy.

 

The local currency gained 19 centavos to 43.25:$1 at the close from 43.44:$1 Wednesday.

 

Trading volume totaled to $757.70 million from $859.90 million.

 

"The peso appreciated after the dollar weakened due to lower [US] Treasury yields and funds coming in to buy peso assets in the form of bonds and equities," a trader at a local bank said.

 

Reuters reported that the dollar fell and global equities markets continued to struggle on Wednesday as concerns over a potential government shutdown in Washington kept investors cautious, even as another vote looms on raising the US debt ceiling.

 

A second trader said there was "risk appetite from investors," driving the peso to strengthen and outperform other currencies.

 

"The peso is the only one that appreciated against the dollar" in the region, she said. 

 

With a relatively light volume, the second trader said the peso is expected to trade "range-bound due to US debt ceiling talks." – VS, GMA News