Peso firms up on dollar’s correction amid virus threat

The Philippine peso appreciated against the US dollar on Friday as the attractiveness of the greenback was reduced by concerns over the threat of new coronavirus strain.

The local currency gained 16.5 centavos to close at P50.815:$1 from Thursday’s finish at 50.98.

The US dollar corrected lower against major global and Asian currencies after the recent decline in US government bond yields due to some increase in risk aversion or flight to the relative safety of US Treasuries amid concerns over the latest coronavirus, as well as lower global crude oil prices that could help reduce inflation and interest rates, Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

“Lower US interest rates/bond yields reduce the attractiveness/allure of the US dollar vs. major global currencies with lower interest rate returns for investors,” Ricafort said.

Recent reports said deaths from the new flu-like virus rose to 17 and more than 540 cases were confirmed. 

The previously unknown coronavirus strain is believed to have emerged from illegally traded wildlife at an animal market in the central city of Wuhan. Cases have been detected as far away as the United States, according to a report by Reuters. —NB, GMA News