THE PESO strengthened to a six-month high on Wednesday even as the greenback strengthened in the morning session due to a risk-off mode among investors.
The local unit ended the session yesterday at P52.35 versus the greenback, four centavos stronger than its P52.39 finish the previous day.
This was the peso’s best showing in nearly six months or since it ended at P52.195 per dollar last May 22.
The peso continued to trade within a wide range, opening the session weaker at P52.49 versus the dollar. It logged an intraday high at P52.35, which was also yesterday’s closing rate, while the session’s trough stood at P52.61 against the greenback.
Dollars traded declined slightly to $727.65 million from the $763.81 million that switched hands the previous day.
Foreign exchange traders interviewed yesterday said the peso strengthened as it tracked the dollar’s movement.
“The peso still continued the trend of recovery against the dollar,” a trader said in a phone interview yesterday.
“Initially, we saw bids coming up as I think the dollar moved higher against major currencies, but eventually in the afternoon session we saw the dollar being pulled down again.”
Reuters reported that the dollar traded firm against major currencies yesterday as investors flocked to safe haven currencies due to escalating concerns on global growth and the trade war between China and the United States.
“Initially, the dollar traded higher due to risk-off tone overnight, but as the market put the dollar on track of the weaker dollar, it continued to trade lower so it’s more on the dovish comments from the Fed (US Federal Reserve),” another trader said.
Last week, Federal Reserve Vice Chairman Richard Clarida acknowledged signs of slowing global growth, which may affect the US economy. He added that the US central bank is “close to being neutral” and that future policy tightening may be fewer in number.
“The peso showed continued strength due to wavering dollar demand as investors look for policy cues amid prevailing uncertainty from the Fed,” a third trader said.
For today, the first trader said the peso may trade between P52.30 and P52.50 versus the dollar, while the other traders gave a P52.25-P52.45 forecast range. — K.A.N. Vidal with Reuters

RELATED ARTICLESMORE FROM AUTHOR