THE PESO strengthened versus the dollar on Tuesday following the speech of the Federal Reserve chairman as well as the trade pact between US and Mexico.
The local unit closed at P53.325 against the greenback on Tuesday, up 14 centavos from the P53.465 finish on Friday.
The peso traded stronger the whole day, opening the session at P53.36 per dollar.
It climbed to as high as P53.32, while its intraday low stood at P53.42 versus the US currency.
Dollars traded climbed to $640.85 million from the $421.05 million that switched hands before the three-day weekend.
A foreign exchange trader said on Tuesday that the dollar “just moved weaker across the board so the peso just followed suit.”
“We’re seeing support level at P53.30 starting to break, so I think there’s a momentum for the dollar-peso to strengthen,” the trader said in a phone interview.
The trader added that the global move of the dollar was lower following the speech of Fed chair Jerome Powell on Friday.
Speaking at a research symposium in Jackson Hole, Wyoming, Mr. Powell said that “further gradual increases in the target range for the federal funds rate will likely be appropriate” as the economy remains strong.
“Not much change really. They are projecting two more rate hikes, but some investors are expecting a more hawkish stance,” the trader added.
“We saw profit-taking on the long dollar position. The dollar is correcting at the moment.”
Meanwhile, UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion said the market was “stable” with the latest developments on global trade, particularly on the news of trade pact between the US and Mexico.
Reuters reported that the two countries reached a deal to overhaul the North American Free Trade Agreement, with Canada expected to also agree to the new terms to preserve the three-nation pact.
For Wednesday, Mr. Asuncion and the trader said they expect the peso to move between P53.20 and P53.40 versus the dollar. — Karl Angelo N. Vidal with Reuters