The peso rebounded slightly on Tuesday as the dollar remained under pressure after the U.S. credit rating was downgraded.
The Philippine Bankers Association showed that the closing price of local units was P55.63 per dollar, completing four Centavos from P55.67 on Monday.
The peso opened the weaker p55.73 against the dollar at the conference Tuesday, which was also the worst performance. Its best intraday is P55.57 against green.
The dollar rose to $19.99 billion on Tuesday from $1.41 billion on Monday.
A trader said in a phone interview that the Peso rose in a “increasing focus on the U.S. economy, still following Moody’s credit rating decline.” ”
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message that the downgrade caused the dollar to weaken most currencies, which also supported the recovery of the local sector.
On Wednesday, traders expect the peso to be between P55.50 and P55.80 per dollar on Tuesday, while Mr Ricafort said it could range from P55.55 to P55.75.
The U.S. Federal Reserve is trading sideways after a week of decline on Tuesday, with cautious measures on the economy expected to pass a bill to expand U.S. fiscal deficit as U.S. lawmakers approach.
Greenback sold on Monday after relegating Moody's last week to the deficit issue. Now, attention turns to Washington's massive tax cut vote on U.S. President Donald J. Trump.
Trump is expected to join Congressional debate on his tax bill on Tuesday. The vote came after Moody stripped the U.S. government of its top credit rating, citing concerns about the country's growing $362 trillion debt pile.
According to partisan analysts, Mr. Trump's bill would increase debt by 3 trillion to $5 trillion. The arousal of fiscal debt, trade frictions, and confidence in persistent American exceptionalism weakens U.S. assets. The dollar index fell as much as 10.6% from its January high, one of the sharpest retreats in three months.
The dollar was breathless after Mr. Trump stopped many of the biggest tariffs announced last month. However, Japan's top trade envoy commented on Tuesday that Tokyo firmly stated in its anti-announcement position that negotiations in the coming weeks and months will not be easy.
Britain agreed on Monday to its most important defence and trade link with the EU since Brexit, following Mr Trump’s tariff turmoil.
Greenback's weakest green changes were small after 144.66 since May 8, 144.75 yen. The dollar index lost 0.6% in the previous session and glided 0.1%. – AMC SY and Reuters
