Philippine Peso Completes Best Week in 17 Months Amid EM Rally

  • Currency advances even after worse-than-expected exports
  • Speculation Fed to delay liftoff benefiting developing nations

The Philippine peso completed its sharpest weekly gain in 17 months amid an emerging-market rally driven by speculation the U.S. won’t raise interest rates this year.

The peso rose 0.5 percent on Friday and 1.9 percent this week, the most since May 2014, to 45.88 a dollar at the close of trading in Manila, prices from the Bankers Association of the Philippines show. It’s dropped 2.6 percent this year, the least among the major Southeast Asian currencies.

Minutes of the Federal Reserve’s September meeting showed officials were concerned the strengthening dollar would weigh on U.S. exports. That added to speculation the central bank would delay raising interest rates until next year after jobs figures last week missed all estimates in a Bloomberg survey. Philippine shipments fell 6.3 percent in August from a year earlier, preliminary data showed Friday, more that the median estimate in a Bloomberg survey for a decline of 2.9 percent.

“The outlook on the Fed, which was positive for other currencies like rupiah and ringgit, boosted the sentiment on the local currency,” Jonathan Ravelas, chief market strategist at BDO Unibank Inc., said in Manila. “This is temporary, though. The overall story over the medium term is that the dollar will get stronger,” said Ravelas, adding that he forecasts the peso will fall to 46.70 a dollar by year-end.

Government bonds were steady this week, with the yield on the five-year notes little changed at 3.485 percent, according to an end-of-day fixing from Philippine Dealing & Exchange Corp.

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