Peso climbs as markets hope for US-China deal
THE PESO rose on Monday amid optimism on the trade talks between the United States and China, even as US President Donald Trump expressed reluctance to seal a deal in the near term.
The local unit finished at P52.31 against the greenback on Monday, higher by 13 centavos than Friday’s P52.44-to-a-dollar close.
The peso opened Monday’s trading session at P52.35 against the dollar. Its highest point for the day was at P52.31, while its intraday low was logged at P52.40 versus the greenback.
Dollars traded on Monday reached $1.069 billion, lower compared to previous session’s $1.397 billion.
“The peso strengthened after US President Trump commented that trade talks with China are still ongoing despite his reluctance to close a deal for the time being,” a trader said via e-mail.
A trader interviewed separately via phone said that investors on Monday were willing to take risk amid “optimism” on the news of the ongoing trade talks between US and China.
Mr. Trump and top White House officials dismissed concerns that economic growth may be faltering, saying on Sunday they saw little risk of recession despite a volatile week on global bond markets, and insisting their trade war with China was doing no damage to the United States.
“We’re doing tremendously well, our consumers are rich, I gave a tremendous tax cut, and they’re loaded up with money,” Mr. Trump said on Sunday.
But he was less optimistic than his aides on striking a trade deal with China, saying that while he believed China was ready to come to an agreement, “I’m not ready to make a deal yet.”
He hinted that the White House would like to see Beijing resolve ongoing protests in Hong Kong first.
“I would like to see Hong Kong worked out in a very humanitarian fashion,” Mr. Trump said. “I think it would be very good for the trade deal.”
White House economic adviser Larry Kudlow said trade deputies from the two countries would speak within 10 days and “if those deputies’ meetings pan out… we are planning to have China come to the USA” to advance negotiations over ending a trade battle that has emerged as a potential risk to global economic growth.
Even with the talks stalled for now and the threat of greater tariffs and other trade restrictions hanging over the world economy, Mr. Kudlow said on “Fox News Sunday” the United States remained “in pretty good shape.”
For today, the peso “may depreciate…as expectations of weaker eurozone inflation reports might drive demand toward the greenback,” the first trader said.
The first trader expects the peso to settle between P52.20 and P52.40 versus the dollar, while the second trader expects peso to move sideways from P52.20 to P52.50. — Mark T. Amoguis with Reuters
