Peso strengthens vs. US dollar for third consecutive session

The Philippine peso strengthened against the US dollar for the third consecutive trading day on Thursday, driven by continued optimism on the local market.

The local currency gained 7 centavos to close at P50.50:$1 from Wednesday's finish of P50.57:$1.

"The peso appreciated from improved local optimism, following the sovereign credit outlook upgrade from Fitch Ratings which has driven participants to unload dollar positions and take profits," Guian Angelo Dumalagan, market economist at the Land Bank of the Philippines, said in an email interview.

Global credit watcher Fitch Ratings on Tuesday upgraded its outlook on the Philippines from "stable" to "positive," indicating an upward trend on the rating scale.

Fitch, however, flagged downside risks such as the outbreak of the coronavirus disease 2019 (COVID-19), previously known as the 2019 novel coronavirus (n-CoV).

The Philippines has so far recorded a total of 408 persons under investigation (PUIs) for the COVID-19 as of Wednesday afternoon, latest government data revealed.

Moving forward, Dumalagan said the peso is expected to continue appreciating given easing concerns between China and the United States.

"Towards the end of the week, the local currency might resume its strength amid the effectivity of China’s 50% tariff reduction on $75 billion worth of imported goods from the US," said Dumalagan.

"Easing US-China trade concerns could also improve investors’ appetite for the riskier currencies like the peso," he explained. —LDF, GMA News