The Philippine peso hit a six-month high against the US dollar on Wednesday following Federal Reserve Chair Janet Yellen’s speech indicating the central bank would need to be cautious in hiking rates further.
The currency gained 32 centavos to close at P46.03 to $1 from its P46.35 finish on Tuesday. It was the highest level for the peso since reaching P46.00 to $1 on October 14 last year.
“The central bank chief wanted to better assess the impact of global developments on inflation and labor market trends in the US before hiking [rates]further,” Nicholas Antonio Mapa, associate economist at the Bank of the Philippine Islands (BPI), said.
Mapa said the expectation for a delayed rate hike cycle forced dealers to unwind long US dollar positions and to snatch up risk assets, like the peso.
“The local unit tracked regional peers with all emerging market currencies stronger against the dollar,” he said.
The peso opened at P46.17 to $1 at the Philippine Dealing System before trading between P46.03 and P46.18. Total transactions rose to P925.5 million from P584.8 million in the previous session.