THE PESO strengthened to a nine-month high against the dollar on Tuesday on the back of developments in the trade negotiations between the United States and China.
The local currency ended Tuesday’s session at P52.025 versus the greenback, four centavos stronger than the P52.065-per-dollar finish last Friday.
This was the peso’s best showing in more than nine months or since it ended at P51.80 versus the dollar on May 10, 2019.
The peso opened the session stronger at P51.955 per dollar, climbing to as high as P51.95 intraday. Meanwhile, its worst showing stood at P52.10 against the US currency.
Dollars traded declined to $909.11 million from the $961.87 million that changed hands in the previous session.
A trader said the peso appreciated against the dollar on easing US-China trade fears.
On Monday, US President Donald J. Trump announced that Washington is planning on delaying the additional tariffs on Chinese goods scheduled to begin on March 1 as its trade negotiations with China made “substantial progress.” The two leaders are also expected to meet in Mar-a-Lago, Florida for a summit to “conclude an agreement.”
However, UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion said the market is “wary” again if a trade deal between China and US will actually happen.
“This wariness is actually across regional currencies. I expect this sentiment to continue this week,” Mr. Asuncion said in a text message yesterday.
He added that the fourth quarter US gross domestic product growth figure “can help drive markets better this week.”
For today, the trader expects the peso to move between P51.90 and P52.10 versus the dollar, while Mr. Asuncion gave a P51.90-P52.30 range.
“The peso is expected to strengthen ahead of key US economic data and various Federal Reserve speeches this week,” the trader said in an e-mail.
Meanwhile, most Asian currencies trod water on Tuesday after investors reined in the previous session’s optimism about progress in Sino-US trade talks as markets awaited more cues on whether the conflict can be resolved. — K.A.N. Vidal with Reuters