THE PESO climbed against the dollar anew to hit a fresh one-year peak, driven by market optimism on China and the United States striking a trade deal.
The local unit closed Thursday’s session at P51.27 versus the greenback, 23 centavos stronger than its P51.50-per-dollar finish on Wednesday. This was the peso’s best showing in more than a year or since it closed at P51.12 per dollar on Feb. 7, 2018.
The peso opened the session at P51.38 versus the dollar. It weakened to as low as P51.405, while it closed at its intraday high.
Trading volume thinned to $876.87 million from the $942.71 million that changed hands the previous session.
Traders interviewed said the peso climbed versus the greenback due to lingering optimism on a US-China deal.
Presidents Donald J. Trump and Xi Jinping are set to meet on the sidelines of the G20 Summit in Osaka, Japan.
Mr. Trump said a bilateral meeting with his Chinese counterpart might result in a trade deal, although he noted another round of tariffs on all remaining Chinese imports may be fired off if talks collapsed again.
“(The remarks) triggered risk-on sentiment across almost all markets,” a trader said in a phone interview. That’s also a positive news for emerging markets and currencies.”
Meanwhile, another trader said the peso also strengthened on “increased dovish Fed (US Federal Reserve) policy bets following the release of weaker US durable goods report.”
For today, the first trader expects the peso to trade between P51.20 and P51.50, while the other trader gave a P51.15-P51.45 range.
“The local currency might weaken amid the effectivity of 50-basis-point reduction in reserve requirement ratio,” the second trader said.
The Bangko Sentral ng Pilipinas will trim by 50 basis points the reserve ratios of universal and commercial banks to 16.5% and for thrift lenders at 6.5% effective today. — Karl Angelo N. Vidal
