..SINGAPORE, July 5 (Reuters) - The Philippine peso rose on
Thursday, a day after Standard & Poor's Ratings Services raised
its credit rating on the country to one notch below investment
grade, while most of its Asian peers eased ahead of the European
Central Bank's rate decision.
S&P upgraded the long-term sovereign credit rating of the
Philippines to BB plus from BB with a stable outlook late on
Wednesday, a move likely to boost bonds and currency trades and
further lift an equity market that has hit new peaks this
week.
The move helped the peso rise 0.6 percent to 41.600 against
the dollar on Thursday, although the local unit gave up some of
the gains on caution over possible dollar-buying intervention by
the central bank. The peso stood at 41.69 by 0310 GMT.
"The market is right now being cautious as they suspect
agent banks (of the central bank) of supporting the dollar and
after a dollar-short squeeze yesterday. Traders are just sitting
on offers but not trying to push dollar/peso lower," said a
European bank dealer in Manila.
"But I would assume that there will be fresh inflows,
especially in the fixed income market. The equity market would
also rally with the upgrade," the dealer said, adding he was
looking to buy the peso on dips.
Manila stocks rose 0.3 percent, outperforming
Asia-Pacific shares outside Japan which fell 0.5
percent.
The three-year Philippine government bond yield
eased 1 basis point to 3.961 percent.
Many traders and analysts said the peso has factored the
upgrade in, to some degree, but the rise could be a further
booster for the domestic currency.
"It is sort of priced in as Fitch has them at BB plus. But
not all," said BNP Paribas currency strategist Thio Chin Loo in
Singapore, adding that the peso was expected to stay firm with a
target of 40.00 by end of this year.
The peso is the best performing emerging Asian currency so
far this year with a 5.1 percent gain against the dollar, thanks
to inflows.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0310 GMT
Japan yen 79.86 79.87 +0.01
Sing dlr 1.2669 1.2664 -0.04
Taiwan dlr 29.856 29.866 +0.03
Korean won 1137.30 1135.80 -0.13
Baht 31.55 31.48 -0.22
Peso 41.69 41.83 +0.34
Rupiah 9385.00 9370.00 -0.16
Rupee 54.48 54.48 +0.00
Ringgit 3.1678 3.1525 -0.48
Yuan 6.3530 6.3477 -0.08
Change so far in 2012
Currency Latest bid End prev year Pct Move
Japan yen 79.86 76.92 -3.68
Sing dlr 1.2669 1.2969 +2.37
Taiwan dlr 29.856 30.290 +1.45
Korean won 1137.30 1151.80 +1.27
Baht 31.55 31.55 +0.00
Peso 41.69 43.84 +5.16
Rupiah 9385.00 9060.00 -3.46
Rupee 54.48 53.08 -2.57
Ringgit 3.1678 3.1685 +0.02
Yuan 6.3530 6.2940 -0.93
(Reporting by Jongwoo Cheon, Additional reporting by Saikat
Chatterjee in HONG KONG; Editing by Jacqueline Wong)
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