THE PESO strengthened further against the dollar on Thursday to a near eight-month high following the release of the narrower trade deficit data for November.
The local unit ended Thursday’s session at P52.225 versus the greenback, 12 centavos stronger than the P52.345-per-dollar finish last Wednesday.
This was the peso’s best finish in nearly eight months or since it closed at P52.195 against the US currency on May 22.
The peso traded stronger the whole day, opening the session at P52.20 against the dollar. It climbed to as high as P52.13, while its intraday low stood at P52.23 per US unit.
Trading volume surged to $1.098 billion from the $775.63 million that changed hands the previous day.
Foreign exchange traders said the peso strengthened against its US counterpart following the release of November trade data.
Data from the Philippine Statistics Authority showed the country’s trade deficit narrowed in November as imports grew at a slower pace while exports shrank. The trade gap stood at $3.9 billion in the said month, narrower than the record high of $4.08 billion recorded in October but still wider than the $3.28 billion a year ago.
A trader said in a phone interview that the slightly better trade deficit data was one of the factors that supported the peso yesterday.
The trader added that the peso continued to rally as the greenback “moved significantly lower” against major currencies overnight, with the support level of the dollar index broken.
“The dollar was lower mainly due to the positive sentiment from the US-China trade talk as well as the slightly dovish stance of the US Fed[eral Reserve],” the trader said. “Although there is still no definite deal, the comments from both China and the US were positive, so it boosted optimism in the market.”
Meanwhile, UnionBank of the Philippines Chief Economist Ruben Carlo O. Asuncion said the peso “just moved a bit” probably due to the release of the Fed minutes of its December meeting, which “confirms that there will be lesser rate hikes this year.”
For today, Mr. Asuncion expects the peso to trade between P52.10 and P52.30, while the trader gave a P52-P52.25 range.
“The peso might depreciate ahead of US December inflation data [release],” another trader said in an e-mail, projecting that the local unit will trade from P52.10-P52.30. — Karl Angelo N. Vidal