THE PESO posted a slight recovery on Tuesday, moving within a wide range as trading resumed, in reaction to mixed dollar movements due to weak US data.

The local unit closed at P51.33 versus the greenback, up by six centavos from the P51.39 finish last Friday.

Financial markets reopened on Tuesday as the Bangko Sentral ng Pilipinas (BSP) opted to resume its trading and clearing operations despite a two-day suspension on government work. Malacañang made the announcement due to a nationwide transport strike rolled out by jeepney operators.

The peso traded generally stronger against the dollar yesterday as it opened at P51.28, even touching P51.19 as its best showing during the session. The currency hit P51.375 as its intraday low before settling at the closing rate.

Traders said Tuesday saw a “pretty active” session, as reflected in the wide range in which the peso moved.

“There was interest to sell from the get-go. I’m not sure if this is flow-related, but the move was pretty quick and then the market bounced rather sharply above P51.30,” one trader said in a phone interview. “The dollar is swinging between gains and losses, as there’s not a lot of directional moves to follow for the peso-dollar trading.”

Another trader said the peso may have also received a boost in reaction to a weaker dollar given the impact of “lower-than-expected” US inflation data released last Friday.

Consumer prices in the US picked up by 0.5% in September but was largely driven by a spike in gasoline prices amid production disruptions due to Hurricane Harvey. Core inflation remained muted, Reuters said in a report.

“The lower dollar-peso price continued [on Monday] and yesterday. There is buying interest on any dollar dips,” the second trader added, which explained the peso moving higher towards the end of the trading session.

The market exchanged $893.2 million on Tuesday, lower than the $1.102 billion traded last Friday. The second trader attributed the above-average trading volume to “aggressive” trading done by a foreign bank rather than an intervention from the central bank.

For Wednesday, both traders expect the peso to trade within the P51.20-P51.40 range, noting that the currency may simply consolidate ahead of key economic data from the United States. Scheduled for release this week are speeches from Federal Reserve officials, as well as data on crude oil inventories and jobless claims.

Both traders also said that President Rodrigo R. Duterte’s declaration of liberating Marawi City from the Maute rebels did not have any significant impact on currency trading.

In a related development, the Bureau of the Treasury has reset the auction of seven-year bonds today in light of Tuesday’s work suspension. The government is looking to raise P15 billion from the issuance, which comes with a remaining life of six years and six months. The notes must be settled by bidders on Thursday. — Melissa Luz T. Lopez

RELATED ARTICLESMORE FROM AUTHOR