The peso gained strength against the US dollar in Tuesday’s trade after a US Federal Reserve official indicated that the greenback has approached “fair value.”
“Comments from a Fed President forced the dollar to retreat against most world currencies as dealers closed long US dollar positions,” Nicholas Antonio Mapa, associate economist at the Bank of the Philippine Islands, said.
The analyst was referring to St. Louis Federal Reserve President James Bullard, who said that the strength seen in the US dollar in recent months was due to the recent months was due to the monetary policies of the European Central Bank (ECB) rather than the Fed’s potential move on rates.
The ECB launched its 60-billion euro bond-buying program earlier this month.
“Bullard indicated that US dollar had approached or reached ‘fair value,’” Mapa explained.
The local currency closed at P44.67 to $1 on Tuesday, appreciating 12 centavos from Monday’s finish at P44.79.
Total volume transacted on the PDS fell to $364.600 million from $542.100 million previously.