THE peso rebounded on Friday as the dollar weakened amid continued concerns over the trade dispute between the United States and China.
The peso ended Friday’s session at P53.28 against the dollar, against the P53.46 finish the previous day.
The peso was stronger from the outset, opening the session at P53.38. The high for the day was P53.23, while the low was P53.46.
Volume rose to $921.5 million from $860.95 million on Thursday.
A trader said that the peso corrected on Friday as the dollar slipped against a basket of Asian currencies.
“The peso corrected after a few sessions trading near P53.50. We’re seeing dollar-Asia trading [higher]. That’s one of the reasons why dollar-peso moved along with other currencies in the region,”
The trader attributed the “slight weakness” of the dollar to the lingering concerns over the trade dispute between the world’s two largest economies.
Since last week, the US and China have been threatening to impose new tariffs on each other’s products, sparking concerns of a looming trade war.
Washington has also threatened Canada, Mexico and the European Union by lifting the temporary reprieve from a 25% duty on steel and a 10% tariff on aluminum.
“The dollar is trading a little bit weaker from [Thursday] night and the peso is taking its cue. For one, the trade tensions are still the main thing this week,” the foreign currency trader said in a phone interview.
Meanwhile, another trader said: “The peso closed stronger still due to the recent policy rate hike from the BSP (Bangko Sentral ng Pilipinas).”
The monetary authority raised its policy rates by another 25 basis points during its fourth review for 2018. Rates now stand in the 3-4% range.
“I guess traders were also trying to reduce some long dollar positions after we saw the BSP hiked its rates again last Wednesday,” the first trader said.
Michael L. Ricafort, head of the Rizal Commercial Banking Corp.’s Economics and Industry Research Division, attributed the strengthening of the peso to “relatively lower global crude oil prices” and a decline in 10-year US government bond yields. — Karl Angelo N. Vidal