Peso climbs on hopes of policy changes in US

BW FILE PHOTO

THE PESO appreciated against the greenback on Thursday supported by hopes of substantial policy changes in the United States under a new administration.

The local unit closed at P48.054 per dollar on Thursday, adding 0.6 centavos from its P48.06 finish on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened the session at P48.04 per dollar. Its weakest showing was at P48.058 while its intraday best P48.035 against the greenback.

Dollars traded slumped to $599.4 million on Thursday from $727.5 million the day prior.

Optimism over “substantial policy reversals” under the administration of US President Joseph R. Biden, Jr. boosted the peso, a trader said in a text message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said there was risk-on sentiment because the new US administration is expected to move away from protectionist policies.

“[Mr.] Biden’s presidency is seen to ease protectionist policies, including on immigration and outsourcing, thereby could lead to more OFW remittances and business process outsourcing revenues, thereby fundamentally supporting the peso,” Mr. Ricafort said in a text message. 

On his first day as US president, Mr. Biden immediately revoked previous policies of his successor, Donald J. Trump. Mr. Biden signed documents to mark the US re-joining the Paris climate accord, Reuters reported. He also revoked an emergency declaration related to a construction of a border wall and ended a travel ban on some majority-Muslim countries.

Mr. Biden likewise urged the US Department of Education to suspend student loan payments until the end-September and for the US Centers for Disease Control and Prevention to extend a moratorium on evictions until the end-March.

For today, Mr. Ricafort gave a forecast range of P48.02 to P48.07 per dollar while the trader sees a wider band of P48 to P48.10. — L.W.T. Noble with Reuters

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