THE PESO climbed versus the dollar on Thursday as the United States and China restart trade talks and following positive local data.
The local unit ended at P51.64 against the greenback on Thursday, gaining 15 centavos from its P51.79-per-dollar finish on Wednesday.
The peso opened the session at P51.80 versus the dollar, which was its worst showing for the day. Meanwhile, its closing level was its intraday best.
Dollars traded on Thursday slipped to $1.158 billion against the $1.234 billion seen on Wednesday.
“Optimism with regard to the trade talks resulted in risk-on sentiment in the markets, benefitting the peso,” a trader said in a phone call.
UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion also attributed the peso’s strength to local trade figures released on Thursday.
“Some positivity around a potential trade agreement between the US and China is helping the peso. A narrower trade deficit for August 2019 is also supporting the local currency,” Mr. Asuncion said in a text message.
The United States’ and China’s top trade negotiators were set to meet on Thursday for the first time since late July to try to find a way out of a 15-month trade war as new irritants between the world’s two largest economies threatened hopes for progress.
Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will seek to narrow differences enough to avoid a scheduled Oct. 15 tariff rate increase on $250 billion worth of Chinese goods.
But the atmosphere surrounding the talks was soured by the US Commerce Department’s decision on Monday to blacklist 28 Chinese public security bureaus, technology and surveillance firms, citing human rights violations of Muslim minority groups in China’s Xinjiang province. A day later, the US State Department imposed visa restrictions on Chinese officials related to the Xinjiang issue.
If negotiations break down again, by Dec. 15, nearly all Chinese goods imports into the United States — more than $500 billion — could be subject to punitive tariffs in the dispute that erupted during US President Donald Trump’s time in office.
Meanwhile, the Philippines’ trade deficit thinned to $2.41 billion in August from $3.6 billion in the same period a year ago, according to data from the Philippine Statistics Authority.
For today, the trader sees the peso moving around the P51.50-51.75 band against the dollar, while UnionBank’s Mr. Asuncion predicts a range of P51.50-51.80. — L.W.T. Noble with Reuters