Share prices closed lower Wednesday on profit taking.
The peso reached its strongest since early August, gaining more than 0.2 percent.
The Philippine Stock Exchange index was down 44.43 points to 6,265.14, a 0.7 percent.
The broader All Shares index was down 19.02 points or 0.57 percent to 3,339.68 percent.
Losers edged gainers 106 to 70 with 34 stocks unchanged. Trading turnover reached P5.75 billion.
The peso closed at 55.39, up from 55.40 on Tuesday.
The currency opened at 55.29 and hit a high of 55.28 and a low of 55.40.
Most emerging Asian currencies hit multi-month highs on Wednesday as the US dollar slid to a more than three-month low on increasingly dovish commentary from the Federal Reserve, while investors also awaited a Thai central bank decision on rates, Reuters reported.
The MSCI International Emerging Market Currency Index rose nearly 0.3 percent, hovering near a 19-month peak.
Fed governor Christopher Waller, a prominent hawkish voice, said overnight that rate cuts could begin in a matter of months, provided inflation keeps falling, sparking a flurry of exits from the safe-haven US dollar and into riskier assets.
“The rally in EM Asia FX and equities has legs if we do not get any positive surprises in the US data,” Nicholas Chia, macro strategist at Standard Chartered said, referring to the Personal Consumption Expenditure and ISM Manufacturing Index data due later this week.
The dollar index, which measures the strength of the US currency against six major rivals, stood at 102.61 as at 0340 GMT.
“Attention will now move to Chair Powell’s speech on Friday to see if the tone points to a clear pivot towards easing,” Daragh Maher, head of research, Americas and head of FX strategy, US at HSBC said in a note.
“If it materializes, this would clearly be a challenge to our bullish USD view.”
Claire Alviar, analyst at Philstocks Financial Inc., said investors took some profit after two consecutive days of market rally.
“Overseas, sentiment was further weighed down by Fed Governor Michelle Bowman’s statement that more rate hikes may be necessary to keep policy sufficiently restrictive to bring inflation down to the 2 percent target,” Alviar said.
Most actively traded International Container Terminal Services Inc. was up P2.80 to P222.80. SM Prime Holdings Inc. was down P1.45 to P32.50. Jollibee Foods Corp. was down P1 to P233.80. BDO Unibank Inc. was down P1.90 to P133.40. Ayala Corp. was up P5 to P662. Ayala Land Inc. was down P0.85 to P30.15. Bank of the Philippine Islands was down P1.80 to P102.70. SM Investments Corp. was up P3 to P848. Metropolitan Bank and Trust Co. was down P0.65 to P50.85. Areit Inc. was down P0.90 to P28.20.
