Peso trades stronger as market anticipates rate cuts in US, PHL

The peso appreciated further against the US dollar on Wednesday in anticipation of a rate cut in both the Philippines and the United States.

The local currency gained 10 centavos to close Wednesday at P51.89:$1, stronger than Tuesday’s finish of $51.99:$1.

“The most probable peso driver today has been the anticipation that the US Fed is more likely to be ready to cut rates,” Ruben Carlo Asuncion, chief economist at the UnionBank of the Philippines, said.

“This is doubled by the expectation that the BSP may also cut rates tomorrow,” he added.

The Federal Open Market Committee (FOMC) is having a two-day meeting on key policy rates on June 18 and 19.

On the domestic front, the Bangko Sentral’s Monetary Board (MB) is scheduled to meet on Thursday, June 20, to decide whether or not changes in key policy rates are warranted.

“These dovish stances of both central banks mentioned are based on anticipated softer growth for the global economy, and the recent expectation of lower global oil prices directly impacting domestic price levels,” said Asuncion. —VDS, GMA News