Peso strengthens to 53-level after Fed rate hike; PSEi slips

Peso strengthens to 53-level after Fed rate hike; PSEi slips

MANILA – The widely expected 25 basis point increase in the Federal Reserve’s key rates resulted in the negative close of the local bourse’s main index on Thursday but the peso improved against the United States dollar.

The Philippine Stock Exchange index (PSEi) shed 0.70 percent, or 49.57 points, to 6,986.19 points.

All Shares ended sideways after declining by 0.09 percent, or 3.39 points, to 3,683.78 points.

However, more of the sectoral indices gained during the day namely Mining and Oil, 3.04 percent; Services, 0.75 percent; Industrial, 0.24 percent; and Financials, 0.20 percent.

Volume reached 1.29 billion shares amounting to PHP8.9 billion.

Advancers led decliners at 114 to 67 while 56 shares were unchanged.

Meanwhile, the local unit ended the day at 53.845 against the US dollar from Wednesday’s 54.475. 

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said Thursday’s close of the local currency is the strongest in more than 7.5 months or since June 17, 2022 when it closed at 53.75.

It opened the day at 54.20 and traded between 53.835 and 54.20. The average level for the day stood at 53.955.

Volume reached USD1.620 billion, up from the previous session’s USD958.9 million.

Ricafort said the fresh Federal Reserve rate hike, which brought its funds rate to between 4.5 to 4.75 percent, a new 15-year high, largely drove financial markets during the day.

Citing reports quoting Federal Reserve chair Jerome Powell, Ricafort said the Fed has hinted for two more rate hikes until May.

Meanwhile, he said “mostly softer US economic data that supports less hawkish Fed but could signal risk of recession.”

Ricafort said the peso’s next important level is at 53.30 levels “which help keep intact the underlying upward trend since June 2021.”

For Friday, the local unit is expected to trade between 53.70 to 54.00 against the US dollar. (PNA)

Leave a Reply