The peso strengthened further and breached the 55 to $1 level to hit a three-month high due to rosy outlook for remittances from overseas Filipino workers (OFWs) toward the holiday season, as well as the dovish signals from the US Federal Reserve.

The local currency gained 19 centavos to close at 55.91 from 56.1 to $1 on Friday. This was the peso's best since closing at 55.74 on Aug. 4.

It opened stronger at 55.80 and rallied to an intra-day high of 55.73 before losing steam to hit an intra-day low of 55.93. Trading volume fell by 37.4 percent to $1.15 billion yesterday from Friday's $1.84 billion.

Last week, the peso gained 85.50 centavos to close at 56.10 from 56.955 to $1 on Oct. 27.

BMI Country Risk and Industry Research said the peso is expected to strengthen slightly to 55.60 to $1 this year after emerging as the worst performing currency in the region, shedding 9.3 percent to 55.755 to $1 last year from 50.999 to $1 in 2021.

'We forecast the Philippine peso to depreciate against the dollar from 55.6 to $1 in 2023 to 56.8 to $1 in 2024. For the Philippines, which remains heavily reliant on imports to meet local demand, this will provide further headwinds as imports will become costlier,' BMI said.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., expects the peso to range between the 55.85 and 56.35 levels this week.

'Peso was stronger due to long holiday weekend, with accumulated remittances and anticipation of upcoming remittances for the holiday season,' Ricafort said.

The economist expects the peso to range between 55.80 and 56 in today's trading.

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