The peso hit a one-month high against the US dollar Thursday and returned to the 50-a-dollar level for the first time since Aug. 10, 2017.
The peso gained seven centavos to close at 50.93 against the greenback Thursday from 51.095 on Wednesday.
Jonathan Ravelas, first vice president and chief market strategist of BDO Unibank Inc., said the greenback was generally weaker on Thursday. “It helped push the peso below the 51 levels today. Expect the currency to try the 50.70/50.80 levels in the near term,” he said.
Security Bank Corp., in its daily market report, said the dollar’s weakness could also be traced to the “less North Korea headlines.”
Foreign exchange executives in the Philippines, however, view any further US rate hikes as the biggest macro issue affecting the peso and its economic growth in 2017, according to the results of a Bloomberg survey. Other challenges raised are global political uncertainty, export growth and US economic and trade policy.
Meanwhile, the gross international reserves, the country’s main buffer against currency fluctuation, climbed to a three-month high of $81.51 billion in Augst, from the July level of $81.07 billion on the revaluation adjustments in gold holdings and income from investments abroad of Bangko Sentral.
“The build-up in reserves was due mainly to inflows arising from the revaluation adjustments on the BSP’s gold holdings resulting from the increase in the price of gold in the international market,” Bangko Sentral Deputy Governor Diwa Guinigundo said in a statement.