THE PESO declined on Tuesday, with the dollar strengthening against major currencies, as investors remained cautious over trade tensions abroad.
The local unit ended Tuesday’s session at P53.535 versus the greenback, 7.5 centavos weaker than the P53.46-per-dollar finish on Monday.
The peso traded weaker the whole day, opening the session at P53.50 per dollar. It slipped to as low as P53.55, while its intraday high stood at P53.495 versus the US currency.
Trading volume slipped to $440.75 million from the $485.8 million that switched hands the previous day.
A foreign currency trader said the peso depreciated heavily as dollar strengthened across major currencies.
“We saw very strong dollar across the board, pushing the dollar-peso [weaker],” the trader said in a phone interview Tuesday, September 4.
The trader added that the level of support at P53.55 “was still there.”
“We saw a lot of sellers that’s why it was capped. Although it shows that the dollar-peso should be moving [weaker],” the trader said, noting the pair should be trading at around the P53.70 level without the support.
“The developments on the trade talks still pointed to stronger dollar amid trader tensions.”
Meanwhile, another trader said there was “significant intervention” by the local central bank at the P53.55 level.
As the country’s monetary authority, the Bangko Sentral ng Pilipinas sometimes conducts “tactical interventions” to temper any sharp swings that may cause the peso to appreciate or depreciate.
The second trader added that the peso declined versus its US counterpart “amid investor caution ahead of the Philippine inflation report” to be released on Wednesday.
Inflation likely accelerated to a fresh multiyear high in August on the back of higher food costs, according to a BusinessWorld poll conducted last week that yielded a median estimate of 5.9%.
For Wednesday, the first trader said the peso will likely move between P53.40 and P53.55 versus the dollar, while the other gave a P53.45-P53.65 range. — Karl Angelo N. Vidal