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Peso surges on Duterte optimism

The Philippine peso climbed to the highest in almost eight months as the incoming administration of Rodrigo Duterte assured investors he will continue the pro-growth policies of outgoing President Benigno Aquino.

The currency’s seven-day rally is set to be the longest since January 2015, and has been aided by $433 million of inflows into local shares since Duterte swept the May 9 election.

Finance Secretary-designate Carlos Dominguez has called the tough-talking mayor of Davao city pragmatic, and one who will build on policies that have made Philippines one of Asia’s fastest-growing economies.

Goldman Sachs Group Inc. and casino mogul Enrique Razon have expressed optimism about the new leader, who takes office June 30.

The peso rose 0.3 percent to 45.885 per dollar at the midday break in Manila, according to prices from the Bankers Association of the Philippines. The currency’s 2.6 percent gain in a month is the best in Asia.

Sentiment toward emerging-market assets has also been bolstered by indications the Federal Reserve will refrain from raising interest rates at its June 14-15 meeting and that any policy tightening will be gradual.

“From the local perspective the fundamentals are strong, so that’s one of the reasons why we go with Asian currencies,” said Joey Cuyegkeng, a Manila-based economist at ING Groep NV. (BLOOMBERG)