THE PESO surged against the dollar on Thursday to return to the P57 level for the first time in nearly three weeks, supported by remittance inflows amid the holidays.

The local unit closed at P57.97 per dollar on Thursday, jumping by 48 centavos from its P58.45 finish on Monday, Bankers Association of the Philippines data showed.

This was the peso’s strongest finish since its P57.735-per-dollar close on Dec. 6.

The peso opened Thursday’s session stronger at P58.35 against the dollar, which was already its weakest showing. Meanwhile, it closed at its intraday best of P57.97 versus the greenback.

Dollars exchanged jumped to $1.76 billion on Thursday from $1.18 billion on Monday.

Philippine financial markets were closed on Dec. 24 and 25 for the Christmas holidays.

“The peso continued to appreciate away from its record lows due to foreign currency inflows amid holiday remittances from abroad,” a trader said in a Viber message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort likewise said that the local unit was supported by the “seasonal surge in overseas Filipino workers’ remittances and conversion to pesos for Christmas holiday-related spending.”

He said this could continue as 2024 comes to a close.

The peso rose as the Philippine stock market also posted gains on Thursday, Mr. Ricafort added.

The benchmark Philippine Stock Exchange index edged up by 0.06% or 4.11 points to close at 6,539.02 on Thursday, while the broader all shares index rose by 0.12% or 4.55 points to end at 3,731.78.

For Friday, which is the last trading day of 2024, the trader said the peso could continue to strengthen amid the market’s currency requirements for year-end transactions and remittance flows.

The trader sees the peso moving between P57.80 and P58.05 versus the dollar, while Mr. Ricafort expects it to range from P57.75 to P58.05.

STRONG DOLLARMeanwhile, the dollar rose alongside US Treasury yields on Thursday, Reuters reported.

As the year-end approaches, trading volumes have begun thinning out and the main focus for investors remains that of the Federal Reserve’s rate outlook. Markets in Hong Kong, Australia and New Zealand were closed for a holiday on Thursday.

Since Fed Chair Jerome H. Powell primed markets for fewer rate cuts next year at the central bank’s last policy meeting of the year, traders are now pricing in just about 35 basis points worth of easing for 2025.

That has in turn lifted US Treasury yields and the dollar, with the greenback’s renewed strength a burden for commodities and gold.

The benchmark 10-year yield ticked up 2.6 basis points (bps) to 4.613% and is up roughly 40 bps for the month thus far. The two-year yield similarly firmed to 4.3489%.

In currencies, the dollar was perched near a two-year high against a basket of currencies at 108.15 and was on track for a monthly gain of more than 2%. — Luisa Maria Jacinta C. Jocson with Reuters