THE PESO continued to decline against the dollar on Thursday due to strong dollar demand  following the release of data showing a wider Philippine trade deficit.

The local currency ended yesterday’s session at P50.80 versus the greenback, nine-and-a-half centavos weaker than its P50.705-per-dollar close on Wednesday.

This is the peso’s weakest close in nearly two months or since it closed at P50.95 per dollar last Nov. 17.

The peso opened yesterday’s session slightly weaker at P50.73 versus the dollar, while its intraday high stood at P50.68. The peso’s worst showing, meanwhile, landed at P50.84 against the greenback.

Dollars traded slid at $749.4 million from the $930.65 million that changed hands in the previous session.

A trader interviewed yesterday said market players were buying a lot of dollars driven by the trade balance data for November, where imports were stronger than the exports.

Data from the Philippine Statistics Authority released last week showed the country’s trade deficit hit a new record high in November at $3.78 billion, higher than the $2.81 billion booked in the comparable year-ago period.

“We saw strong dollar demand due to the trade deficit, imports are stronger due to the Build, Build, Build,” the trader said, referring to the government’s infrastructure program.

The trader added that the strong dollar was also supported by weak remittances from overseas Filipinos after the holiday season, as well as the better dollar-peso trading offshore, prompting onshore trading to follow suit.

Asked who were buying more dollars, a second trader said: “We haven’t seen much, but a lot of banks are buying. No clue as to who [were] buying.”

Ruben Carlo O. Asuncion, UnionBank of the Philippines chief economist, said yesterday’s trading was mainly driven by “positive sentiment on the US economy.”

For today, the first trader said the peso will move between P50.75 and P50.95, while the second trader gave a wider range of P50.65 to P51. — KANV

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