THE PESO moved sideways on Monday following the latest round of cuts to banks’ reserve requirement ratios (RRR) and as markets await the Bangko Sentral ng Pilipinas’ (BSP) monetary policy decision.

The local unit closed at P50.77 versus the greenback on Monday, depreciating by less than a centavo from its P50.765 finish on Friday, according to data from the Bankers Association of the Philippines.

The peso opened the session at P50.83 per dollar. Its weakest showing was at P50.875, while its intraday best was its close of P50.77 against the greenback.

Dollars traded dropped to $653.4 million yesterday from $899.2 million on Friday.

Traders attributed the peso’s performance for the day to the central bank’s upcoming policy meeting as well as data from the United States.

“The peso weakened slightly from the impact of the latest BSP (Bangko Sentral ng Pilipinas) reserve requirement cut and upbeat US labor reports last Friday,” a trader said in an e-mail.

Meanwhile, another trader said the market is on the lookout for new signals from the central bank.

“The peso was flat as market is still awaiting for more clues regarding the BSP’s action especially with the Monetary Board meeting this Thursday. With this, we see sideways trading for the rest of the week,” the second trader said in a phone call.

The RRR for universal and commercial lenders now stands at 14% and four percent for thrift banks following 400 basis points worth of cuts for the year thus far, while the reserve ratio of nonbank financial institutions with quasi-banking functions is at 14%. Meanwhile, the RRR of rural banks is at three percent.

Meanwhile, the BSP Monetary Board’s Dec. 12 policy meeting is the eighth and last for 2019.

In the US, Reuters reported that November job growth was strongest in 10 months fueled by a hiring upsurge in the health care industry and the return to work of production workers at General Motors.

The monthly employment report from the US Labor department also showed that unemployment rate slowed to its lowest levels in nearly half a century and wage gains remained near their strongest in a decade.

The US government’s survey of establishments showed that non-farm payrolls grew by 266,000 jobs in November, pushed by the 60,200 additional health care workers paired with the increased hiring at restaurant bars.

For today, the first trader expects the peso to range at P50.65-50.85 versus the dollar, while the second trader sees the local unit moving around the P50.70-50.90 band.

Meanwhile, most Asian currencies also remained range-bound on Monday, as investors awaited trade talk developments ahead of the scheduled implementation of new tariffs by the US on Chinese imports.

The US is set to impose a new round of trade tariffs on Chinese goods on Dec. 15, a plan which White House economic adviser Larry Kudlow said on Friday was still in place. — LWTN with Reuters

RELATED ARTICLESMORE FROM AUTHOR