Peso continues winning streak to carve fresh three-year high

The Philippine peso appreciated against the US dollar for the fourth consecutive trading session on Monday to mark a fresh three-year high, as geopolitical tensions continued to weigh on the dollar.

The local currency gained 8 centavos to close at P49.25:$1, its strongest in over three years since November 15, 2016 when it closed at P49.17:$1.

According to Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort, the dollar was dragged by ongoing tensions with China.

"The peso continued to appreciate... amid the continued weakness of the US dollar vs. major global currencies to new lows in 22 months amid increased US-China tensions," he said in a mobile message.

This comes as Washington ordered China's consulate in Houston to close, prompting Beijing to react in kind by closing the US consulate in Chengdu, as reported by Reuters.

US Secretary of State Mike Pompeo was also reported to have taken fresh aim at China last week, as he said Washington and its allies must use "more creative and assertive ways" to press China to change its ways.

Aside from this, Ricafort noted lower US interest rates and bond yields that he said reduced the allure of the greenback with low interest rate returns.

"Continued RTB offering and other new issuances/offerings of corporate bonds and first-ever REIT in the country could have attracted some foreign buyers/investors, thereby partly supported the peso's recent gains," he said.

The Philippines' first real estate investment trust (REIT) initial public offering (IPO), undertaken by Ayala-Land sponsored AREIT Inc., has been priced at P27.00 per share.

The company earlier announced an offer period that will start on July 27 and end on August 3, 2020, making it the first REIT IPO in the Philippines. —KG, GMA News