THE PESO strengthened a tad against the dollar on Wednesday as market players look for fresh leads ahead of the local central bank’s rate-setting meeting.
The local unit closed at P53.09 versus the greenback yesterday, gaining a centavo from the P53.10-per-dollar finish on Tuesday.
The peso traded within a tight range, opening the session stronger at P53.05 against the dollar. Its intraday trough stood at P53.13, while its best showing was at P52.97 per US currency.
Trading volume slid to $731.5 million from the $738.7 million recorded the previous day.
A foreign exchange trader said the peso consolidated yesterday after trading “wildly” the previous days.
“We’re stabilizing a bit after the big volatility we saw a couple of days ago,” the trader said in a phone interview. “We’re consolidating and waiting for fresh leads.”
Meanwhile, another trader said the peso “went almost sideways” as market players remained uncertain to the monetary policy decision of the Bangko Sentral ng Pilipinas (BSP) at its meeting today.
“The market is divided whether the BSP will hold or raise its interest rates,” the first trader said. “Before, we were expecting another hike, but now it seems that the market is not sure.”
The central bank has raised the policy rates by a cumulative 150 basis points since May to arrest inflation expectations.
Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, added that the market is looking for opportunities even as expectations are mixed, noting that the peso movement yesterday was “due to the dollar’s strength.”
For Thursday, the first trader expects the peso to “continue to consolidate” between P52.90 and P53.30, while Mr. Asuncion gave a P53-P53.40 range.
“The peso might strengthen as views of a rate hike might still influence local market sentiment,” the second trader said, giving a P53-P53.20 range. — Karl Angelo N. Vidal

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