Yellen’s statement fails to hamper local currency, PSEi

MANILA-The statement by Federal Reserve chair Janet Yellen before the US Congress about the gradual rise of interest rates failed to hamper much the Philippine peso and the main stocks index on Thursday.

The local currency even slightly appreciated Thursday at 50.53, or just two centavos from 50.55 Wednesday, which a trader attributed to Yellen's dovish comments.

The Fed Chair, in her semi-annual testimony, said gradual increases in the Fed Fund rates were likely to be appropriate over the next few years.

This was a hawkish statement, the trader said but pointed out that what affected investors' outlook was the Fed chair's additional comment that the federal funds rate would not have to rise all that much further to get to a neutral policy stance.

The trader said markets were geared up for a possible rate hike by the end of the year given the positive economic reports from the US in recent weeks.

However, since Fed officials keep on saying that future hikes still be data-dependent, market players remain on the lookout for whatever Fed officials say, the trader said.

With Yellen set to appear again before Congress for the continuation of her monetary report Thursday night (Philippine time), markets players stayed at the sidelines.

The peso, thus, opened little changed at 50.45 from 50.47 Wednesday.

It traded between 50.56 and 50.40 resulting in an average of 50.48.

Volume for the day totaled USD372.5 million, lower than the USD595.7 million in the previous session, which the trader said was a proof of market players' wait-and-see stance.

The currency pair is seen to trade between 50.40 and 50.60 on Friday.

At the local bourse, the Philippine Stock Exchange index (PSEi) finished the day at 7,936.85 points, down a negligible 0.02 percent, or 1.52 points.

Most of the other counter followed, with the broader All Shares also down 0.02 percent, or 0.95 points, to 4,753.72 points.

It was a mixed results for the sectors with the Holding Firms, Financials, and Mining and Oil up 0.09 percent, 0.07 percent, and 0.04 percent, respectively.

Services, Industrial, and Property, meanwhile, declined by 0.59 percent, 0.12 percent, and 0.07 percent, respectively.

Volume reached 1.99 billion shares amounting to PHP9.23 billion.

Losers led gainers at 105 to 88 while 56 stocks were unchanged.

Source: Philippines News Agency