THE PESO weakened against the dollar on Monday as the US government shutdown continued.

The local currency finished at P50.835 against the greenback yesterday, losing 11.5 centavos from its P50.72-per-dollar close seen on Friday.

Monday’s finish was also the peso’s worst performance in more than two months since it closed at P50.95-to-the-dollar on Nov. 17.

The local unit traded weaker during Monday’s session, opening at P50.74 versus the dollar, which was also its best showing for the day. Its intraday low, meanwhile, landed at P50.90 against the greenback.

Dollars traded yesterday rose to $868.5 million from the $819.2 million that changed hands on Friday.

“After the one-day pause, dollar-peso continued to trade higher,” a trader said in a phone interview, referring to the peso’s strength on Friday, where it gained eight centavos to close at P50.72.

Despite the US government shutdown, he said the dollar is still more attractive than the local currency despite global risk aversion on the US currency.

“In terms of the local market, the safe haven is still the dollar, therefore the greenback still strengthened,” he said.

Reuters reported Republican and Democratic leaders of the US Senate held talks on Sunday in  order to break the impasse. Reuters quoted Senate Majority Leader Mitch McConnell as saying late on Sunday that an overnight vote on a measure to fund government operations through Feb. 8 was cancelled and would instead be held at 12 p.m. (1700 GMT) on Monday.

“[T]raders are likely consolidating their positions on optimism ahead of immediate resolution of the recent shutdown within the week which might help strengthen the dollar,” a second trader said in an e-mail.

The first trader added: “We saw a bit of profit taking by some market players when the market saw [the peso] on the [low],” also suspecting an intervention from the central bank.

The Bangko Sentral ng Pilipinas sometimes taps the country’s foreign currency reserves to temper the volatility in the foreign exchange market.

For today, two traders expect the peso to move from P50.80 to P51, while another trader gave a slightly wider reading between P50.70 and P51. — K.A.N. Vidal

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