THE PESO weakened on Thursday due to risk-off sentiment arising from geopolitical tensions in Hong Kong and Europe.

The local unit ended at P51.24 against the greenback on Thursday, weaker by 27 centavos from the P50.97 versus the dollar finish on Wednesday.

The peso opened the session at a flat P51-to-a-dollar. Its weakest point for the day was seen at P50.92, while its intraday best was at P51.29.

Dollars traded on Thursday rose to $1.225 billion from $1.162 billion on Wednesday.

According to one trader, market investors opted for safe-haven currencies due to the continued geopolitical uncertainties abroad.

“The peso weakened from investor safe-haven demand amid lingering geopolitical uncertainties in Hong Kong and United Kingdom. Expectations of dovish cues ahead of the European Central Bank policy meeting tonight has also boosted the greenback against the peso,” the trader said in an email on Thursday.

Another trader attributed the peso’s falldown to a “sharp squeeze” in the market.

“There was a sharp squeeze today as the market was short. So nagbreak above to cover (So [the market] broke above to cover). There is also a modest dollar strength so I feel that contributed as well,” the second trader said in a phone call on Thursday.

Hong Kong’s legislature on Wednesday formally withdrew planned legislation that would have allowed extraditions to mainland China, but the move was unlikely to end months of unrest as it met just one of five demands of pro-democracy demonstrators.

Hong Kong leader Carrie Lam had said many times the extradition bill was as good as dead and that other demands, including universal suffrage and an amnesty for all those charged with rioting, were beyond her control.

Meanwhile, a source on Thursday said the United Kingdom will ultimately leave the European Union on the terms of Prime Minister Boris Johnson’s Brexit deal even though parliament has complicated the timing of the divorce.

“This ends with us leaving with the PM’s deal,” a senior Downing Street source told Reuters, who spoke on condition of anonymity. “We will leave with a deal, with the PM’s deal.”

When asked when Brexit would happen given a deadline of Oct. 31, the source said: “Parliament has taken back control.”

For today, the first trader sees the peso trading at a range of P51.10-51.40 while the second trader expects it to end around the P51.10-51.40 band. — Luz Wendy T. Noble with Reuters