Peso extends gains, closes at P49.81 vs $1

ABS-CBN News

Posted at Jan 03 2018 05:00 PM | Updated as of Jan 03 2018 09:04 PM

MANILA - The peso extended its rally to an eighth straight session on Wednesday, but an analyst said the advance could be temporary.

The peso closed at P49.81 to the dollar from P49.93 during the last trading day of 2017. Analysts earlier attributed the strength in part to seasonal remittances from overseas Filipinos.

The peso could strengthen further to P49.20 to the dollar but could weaken to P53 as monetary authorities around the world raise interest rates, said Tomasz Wisniewski chief analyst at Alpari Research and Analysis.

"Because it's all about the interest rates at the end of the day. And if we do have those expectations about interest rates rises and they won't be delivered, that would mean a drop in the value of the currency," Wisniewski told ANC's Market Edge with Cathy Yang.

Wisniewski said higher consumption taxes were unlikely to spike inflation past the central bank's 2 to 4 percent target.