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Peso climbs on stimulus hopes

peso climbs on stimulus hopes - Peso climbs on stimulus hopes

THE PESO rebounded on Thursday as sentiment improved following progress on a vaccine against the coronavirus disease 2019 and a fresh economic stimulus fund in the United States.

The local unit closed at P48.355 versus the dollar on Thursday, rising by 3.5 centavos from its P48.39 finish on Wednesday.

The peso opened Thursday’s session at P48.43 against the greenback, which was also its weakest showing for the day. Meanwhile, it logged an intraday high of P48.35 per dollar.

Dollars traded slipped to $519.35 million on Thursday from $584.4 million on Wednesday.

A trader said the peso strengthened after US President Donald J. Trump agreed to sign individual stimulus packages to lessen the impact of COVID-19 abroad.

“The local currency appreciated after US President Trump expressed support for piecewise stimulus packages, rolling back from a complete halt of stimulus talks,” the trader said in an email.

Top White House officials on Wednesday downplayed the possibility of more coronavirus relief, while House Speaker Nancy Pelosi disparaged President Donald Trump for backing away from talks on a comprehensive deal, Reuters reported.

White House Chief of Staff Mark Meadows told reporters that “the stimulus negotiations are off,” echoing Mr. Trump’s announcement on Tuesday, and said in an interview on Fox News the administration backed a more piecemeal approach to help some sectors of the economy.

But in a separate interview with CNBC, White House economic adviser Larry Kudlow said that approach would likely not work either.

On Tuesday evening, after having shut down the negotiations on a comprehensive coronavirus package during the day, Mr. Trump wrote on Twitter that Congress should pass money for airlines, small businesses, and stimulus checks of $1,200 for individuals.

Ms. Pelosi spoke with Treasury Secretary Steven Mnuchin by phone on Wednesday evening about a potential standalone bill for $25 billion in aid to airlines that Democrats tried to advance last week, her spokesman wrote on Twitter.

Mr. Mnuchin, who had been Ms. Pelosi’s negotiating partner as they tried to reach a comprehensive package in recent days, agreed to talk again on Thursday, the spokesman, Drew Hammill, said.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message that the peso strengthened after the World Health Organization floated the possibility of a COVID-19 vaccine this year.

A vaccine against COVID-19 may be ready by yearend, the head of the World Health Organization said on Tuesday, Reuters reported.

WHO Director-General Tedros Adhanom Ghebreyesus called for solidarity and political commitment by all leaders to ensure equal distribution of vaccines when they become available.

Nine experimental vaccines are in the pipeline of the WHO’s COVAX global vaccine facility that aims to distribute 2 billion doses by the end of 2021.

For today, the trader expects the peso to range from P48.30 to P48.50 versus the dollar while Mr. Ricafort sees the local unit moving from P48.35 to P48.45. — KKTJ with Reuters

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