THE PESO strengthened versus the greenback yesterday to log its best showing in nearly two weeks, with dollar inflows and negative remarks by US President Donald J. Trump allowing the currency to firm up for the third straight day.

The local unit closed at P51 against the dollar on Thursday, appreciating from its P51.22 finish the previous day. It is also the peso’s best showing since a P50.98-per-dollar close logged on Aug. 11.

The local currency performed stronger versus the greenback throughout the session. It opened at P51.09 to a dollar, already 13 centavos up from Wednesday’s rate. It briefly touch P51.14 as its intraday low and P50.98 as its best showing before settling at the closing rate.

Two traders interviewed yesterday said huge dollar flows for the second straight day pushed the exchange rate lower.

“There are flows coming in. There is a bigger supply of dollars being sold off, and some local banks are heavily buying. We think local banks are preparing for incoming demand sometime early next week or by the start of September,” one trader said in a phone interview.

Financial markets will be closed on Monday due to the National Heroes’ Day, a public holiday in the Philippines. Traders often note stronger corporate demand every month’s end as they settle obligations.

Dollars traded yesterday reached $1.137 billion, rising from the $949.1 million which exchanged hands on Wednesday that was previously attributed to the Japan Tobacco Inc.’s acquisition of local cigarette firm Mighty Corp. The transaction is priced at $936 million or P46.8 billion.

The trader also said that the Bangko Sentral ng Pilipinas (BSP) likely intervened during yesterday’s session to cap the exchange rate at P51.00.

The central bank sometimes steps in during day-to-day trading to temper any sharp swings of the peso versus the dollar.

A second trader attributed the weaker dollar to overseas developments, which pushed emerging market currencies like the peso to appreciate.

“The political chatter of Trump weakened the dollar overnight, while the euro strengthened after (Mario) Draghi’s remarks,” he said.

He was referring to Mr. Trump’s fresh threats that he is looking to end the NAFTA trade treaty with Mexico and Canada, along with his warning to shut down the federal government just to secure funding to put up a wall along the US-Mexico border.

On Wednesday, European Central Bank president Mario Draghi warned against hasty policy responses, giving no hint on the monetary authority’s next moves.

For today, the first trader said the peso could test a new high and trade within P50.90 to P51.20, while the second trader sees a lower P50.85-P51.15 range.

All eyes are now on the Economic Policy Symposium in Jackson Hole, Wyoming scheduled on Friday (US time) where US Federal Reserve chair Janet L. Yellen and Mr. Draghi are set to speak, as market players look for cues for their next policy moves. — Melissa Luz T. Lopez

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