Peso appreciates to 4-year high

Posted at 10/17/12 7:55 AM

MANILA, Philippines - The peso closed at a four-and-a-half year high yesterday, following other Asian currencies which appreciated on the back of good news from the US.

The local currency ended trading at 41.33 to a dollar, 12.5 centavos stronger than Monday’s close of 41.455 to $1. Dollars traded reached $1.021 billion, up from $687.950 million the previous day.

“The good retail sales in the US possibly caused the peso’s strength. Actually, most currencies and equities in the region performed well today,” a trader at a local bank said in a phone interview.

The US Commerce Department on late Monday reported that retail sales rose 1.1 percent in September, the fastest rise since October 2010. The good news heightened investor appetite for risky assets, including those from the Philippines.

“The risk-on tone is very well placed now and basically the appreciation of the peso is in line with regional developments, which makes the peso still competitive,” another bank trader said.

He noted that from Aug. to Oct. 16, “the Thai baht has appreciated more than the peso.” He however did not cite data. Data from the Philippine Dealing and Exchange Corp. however showed that since the last trading day of 2011, the peso has firmed up by 5.72 percent till yesterday.

“Thus, it (the rise of the peso) should not be a cause of concern,” he added.