• ‘Fed’s comments weaken dollar’

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    Dovish comments by the United States Federal Reserve continue to weaken the dollar against regional currencies including the peso, the central bank said on Thursday.

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    “The strength of regional currencies (including peso) today is carry over momentum from the more dovish Fed comments yesterday,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said in a text message to reporters on Thursday.

    The Philippine peso touched the P45 level against the US dollar on Thursday but returend to P46 level to close at P46.07:$1.

    The currency lose 4 centavos from its P46.03 finish on Wednesday.

    The peso opened at P45.90 to $1 at the Philippine Dealing System before trading between P45.90 and P46.07. Total transactions fell P600 million from P925.5 million in the previous session.

    Tetangco said Yellen’s comments fortified market views that the Fed has indeed turned more dovish than first anticipated when the it commenced lift off last year.

    “This seems to indeed have given the market more confidence to take on risk…,” he said.
    Markets should, however, be careful not to get ahead of themselves, as the underlying US economic trend continues to be relatively better than the rest the world, he stressed.

    For its part, the BSP is continuing to monitor these developments, he said, noting that monetary authorities do not see any need to veer away from current monetary stance and foreign exchange policy.

    “[B]ut we will make adjustments should such be needed to keep any build up of unwarranted market exuberance at bay,” he said.

    “So far the peso has continued to move in the middle of the pack of regional currencies thus no need for specific action on our part at this time,” he concluded.

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