Peso still going strong vs dollar

MANILA, Philippines - The peso continued to gain strength against the dollar, rising by another 16.5 centavos to close at its strongest level in more than 30 months as the US Federal Reserve continued its unconventional monetary easing, translating in the further weakening of the dollar against other major currencies.

The peso opened strong at 42.75 and hit an intra-day high of 42.55 before closing at 42.59 to $1.

A total of $964.14 million changed hands at the Philippine Dealing and Exchange Corp. (PDEX), down from Tuesday’s volume of $1.083 billion.

Traders said the US dollar continued to weaken against other currencies, including the Philippine peso after the US Fed announced a Treasury bond buying program as a form of quantitative easing to inject more liquidity in the system.

The US Fed announced that it plans to buy at least $500 billion of long-term securities signalling a new round of monetary easing.

Traders believed that the decision to pump more money into the world’s largest economy was in reaction to slow two-percent annualized gross domestic product (GDP) growth recorded by the US in the third quarter of the year while its unemployment stood at nearly 10 percent.

Traders and analysts see the peso testing the 41 to $1 level within the fourth quarter of the year with the start of the influx of remittances from overseas Filipino workers in line with the start of the Christmas season.