Peso gains on vaccine progress in US, UK

THE PESO strengthened anew against the greenback on Wednesday, backed by hopes of positive vaccine developments in the United States and the United Kingdom.

The local unit finished trading at P48.05 per dollar on Wednesday, gaining three centavos from its close of P48.08 on Monday, data from the Bankers Association of the Philippines showed.

The peso opened Wednesday’s session at P48.12 versus the greenback. Its weakest showing was at P48.125, while its closing level was its intraday best.

Dollars traded dropped to $505.8 million yesterday from $539.45 million on Monday.

News related to vaccines resulted in risk-off sentiment that benefited the peso, analysts said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the vaccine progress in the UK made market sentiment upbeat.

On Tuesday, 90-year-old Margaret Keenan became the world’s first person to receive a vaccine shot in central England, Reuters reported. The United Kingdom is the first globally to kick off mass vaccinations and administer a shot developed by Pfizer, Inc. and BioNTech SE.

Meanwhile, the trader cited new findings in the US about Pfizer’s vaccine.

“The peso strengthened anew from market optimism after the US Food and Drug Administration (FDA) noted that the Pfizer vaccine does not have any untoward findings for its emergency use application,” the trader said in an e-mail.

The US FDA gave its seal of approval to the firm on Tuesday and released documents showing there were no issues relating to safety or efficacy from emergency use of the vaccine.

For today, the peso is seen declining against the dollar ahead of the European Central Bank’s policy review.

“The local currency might depreciate [this Thursday] amid expectations of dovish guidance from the European Central Bank tomorrow as the policy-setting authority is expected to provide details in its asset purchases program from its December meeting,” the trader said.

Mr. Ricafort gave a forecast range of P48.00 to P48.10 per dollar. — L.W.T. Noble with Reuters

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