Home Banking & Finance Peso up ahead of US jobs data
Peso up ahead of US jobs data
THE PESO moved sideways against the dollar on Thursday due to profit taking ahead of the US non-farm payrolls data.
The local currency rose to P50.65 against the greenback yesterday, gaining six centavos from its P50.71-per-dollar finish the prior day.
The peso opened weaker at P50.77, while its worst showing for the day stood at P50.81 versus the dollar. It closed at its intraday high.
Dollars traded surged to $706.6 million yesterday from $599.2 million the previous day.
“Dollar-peso traded lower at P50.65 due to profit taking ahead of the non-farm payroll data,” a trader said over the phone.
Meanwhile, traders said yesterday’s close was within range, with another trader adding that the peso traded mostly within the P50.73-to-P50.77 level.
“Investors have been looking for fresh new leads but found none,” Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, said in an e-mail.
A trader added that there were some flows from offshore markets.
“In fact, onshore, we didn’t see any flows from our end; we just heard there might be some inflows from the offshore markets,” the trader said.
“Towards the end, we just saw a lot of players just tried to sell down when dollar-peso was already trying to close higher.”
Another trader attributed the slight strengthening of the peso to the “fears of possible US government shutdown should the US Congress fail to pass the federal budget within the week.”
Back home, Mr. Asuncion noted that market players will also watch how the bicameral conference on the tax reform bill will pan out.
For today, a trader said the peso-dollar exchange will play within P50.60 to P50.90, while another trader gave a higher range of P50.50 to P50.80.
“The peso is expected to strengthen due to likely stronger Eurozone [third] quarter GDP (gross domestic product) and expected hawkish remarks from Mario Draghi’s speech [yesterday] but may be capped by positive developments on the US tax reform bill,” a trader said.
Other Asian currencies drifted on Thursday, with investors shying away from risk ahead of key central bank meetings next week and due to political uncertainty in the Middle East.
Market players expect the mood to be cautious in the run-up to next Thursday, when both the US Federal Reserve and the European Central Bank are expected to hold policy meetings.
Elsewhere, US President Donald J. Trump on Wednesday reversed decades of US policy and recognized Jerusalem as the capital of Israel, imperilling Middle East peace efforts and upsetting the Arab world and Western allies alike. — K.A.N. Vidal with Reuters