THE PESO dropped against the dollar on Thursday after news of a Chinese port banning Australian coal imports hit the latter’s currency.
The local unit ended yesterday’s session at P52.13 versus the greenback, seven centavos weaker than the P52.06 finish last Wednesday.
The peso opened stronger at P51.98 against the dollar, going up to as high as P51.97 intraday. However, it declined in the afternoon session to log its worst showing for the day at P52.145 versus the US currency.
Dollars traded climbed to $1.234 billion from the $873.34 million that switched hands the previous day.
Two traders said the peso strengthened in the morning session only to take a u-turn in the latter part of the trading day.
“We saw buying interest for the dollar in the afternoon session since the offer prices are up,” a trader said in a phone interview.
Another trader said the dollar bounced back on the news that the Dalian port in China has banned imports of Australian coal and will cap overall coal imports for this year at 12 million tons.
“This led to the dollar moving higher against Asian currencies, and even the Australian dollar moved,” the second trader said. “If you look at the move, the Aussie dollar suddenly dropped. Because of this, it created a bit of safe-haven trading for the dollar.”
For today, the first trader expects the peso to move between P52 and P52-30, while the other gave a wider P51.90-P52.50 range.
Meanwhile, ING Bank N.V. Manila senior economist Nicholas Antonio T. Mapa said the peso enjoyed a “modest appreciation pressure” in the first few weeks of 2019, propelled by portfolio flows.
Mr. Mapa added that the peso continues to “hover steadily” in the middle of the regional rally pack, a stark contrast from last year when the local unit bucked the movement of most regional currencies on concerns about the current account and inflation. — K.A.N. Vidal