THE peso firmed against the dollar on Friday as the announcement of trade talks between China and the United States next week encouraged some risk-on sentiment on the market, though trading came in a narrow range and volume declined.
The peso closed at P53.425 against the dollar on Friday, compared with its Thursday finish of P53.44.
The peso opened at P53.41 and hit an intraday high of P53.37. The low was P53.455 against the dollar.
Trading volume declined sharply to $581.88 million from $884.1 million on Thursday.
In a phone interview, a foreign exchange trader said the peso traded within a very tight range once more.
“The greenback traded higher across the major currencies near 4 in the afternoon, but after that, it quickly reversed,” the trader said on Friday.
Another trader said the peso strengthened today “following the news of possible resumption of trade talks between the two largest economies, the US and China.”
Reuters reported that Beijing and Washington will hold lower-level talks this month, offering hope of a possible resolution to the escalating trade war.
The talks in Washington will take place on Aug. 21-22, just before new tariffs on Chinese goods, as well as retaliatory levies on US products, take effect.
“Although we did not see any catalyst for the peso, for the dollar it’s more of the US-China talks. It might somehow shift the risk-on sentiment from risk-off,” the first trader added.
UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion said the peso moved sideways as the market anticipated a rather more silent trading day.
“After the turbulent week, market sentiment was more positive on the lira and the trade war,” he said in a text message, referring to the Turkish currency, which was under pressure recently amid threats of US sanctions. — Karl Angelo N. Vidal

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