THE PESO plunged against the dollar on Wednesday due to upbeat sentiment on the US tax package and cautiousness over US employment data.

The local currency ended Wednesday’s session at P50.71, eight centavos weaker than its P50.63-per-dollar finish on Tuesday.

The peso opened weaker at P50.71 against the greenback. Its worst showing for the day was seen at P50.74, while its intraday peak stood at P50.63-per-dollar.

Dollars traded dropped to $599.2 million from the $668.1 million that changed hands in the previous session.

A trader said the dollar market is still in a positive mode following the passage of the US tax package in the Senate on Saturday.

“The market is still bullish since they saw positive effects brought by the US tax reform,” the trader said in an e-mail.

She added that market players were cautious on the US economic data on employment which was released yesterday.

“We’re looking at the ADP employment data, so the players remained cautious on the upside. We’re expecting the data to be weak.”

Another trader noted that there was consolidation when the peso breached the P50.46-per-dollar level.

“Overall, I would say we’re just seeing mild upticks and it would still be considered as trading in consolidation phase,” the trader said, adding that the local trading is in line with the foreign exchange trading in the region.

Back home, market players are looking at the bicameral meetings for the passage of the first tax reform package of the government.

“That would be monitored closely by the market players and see how it impacts the Philippine economy and definitely, we will probably try to gauge what the sentiments would be,” the trader said.

For Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, the greenback remained steady amid the global market succumbing to the profit-taking trend this week.

“Investors might have taken some profit overall and may have not been open to take new positions at this point,” Mr. Asuncion added.

For today, traders expect the peso to range between P50.45 and P51.10, while the first trader explained: “The initial resistance is at P50.80 so if broken, we’re looking at P50.60 to P50.90.” — KANV