Peso rises on dovish Fed 

THE PESO appreciated further against the dollar as the US central bank said it would continue to support the world’s largest economy amid the coronavirus crisis.

The local unit ended trading at P48.605 per dollar, gaining 3.5 centavos from Tuesday’s close of P48.64.

The peso opened the session at P48.60 against the dollar. Its weakest showing was at P48.75 while its intraday best was at P48.57 versus the greenback.

Dollars traded slipped to $1.187 billion on Wednesday from $1.221 billion on Tuesday.

Analysts said the peso’s appreciation came as the Federal Reserve said it would keep rates low to support the US economy.

“The peso appreciated after US Federal Reserve Chairman [Jerome J.] Powell reiterated dovish policy stance in his testimony to the US Senate Banking Committee overnight,” a trader said in an email.  

Mr. Powell on Tuesday said they will focus on helping the country towards economic recovery given the dire unemployment, Reuters reported.

“Monetary policy is accommodative and it continues to need to be accommodative… Expect us to move carefully, patiently, and with a lot of advance warning,” he told legislators.

The Fed’s $120 billion in monthly bond purchases will continue “at least at the current pace until we make substantial further progress towards our goals … which we have not really been making,” Mr. Powell said. 

Mr. Powell’s signal to keep quantitative easing through bond purchases also pushed risk-off sentiment and helped the peso gain versus the greenback, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Financial markets are closed on Thursday to commemorate the anniversary of the EDSA People Power Revolution. — L.W.T. Noble with Reuters