peso remittance
THE PESO climbed ahead of the Bangko Sentral ng Pilipinas’ review. — PHILSTAR/KRIZ JOHN ROSALES

THE PESO strengthened against the dollar on Tuesday as traders position ahead of the Bangko Sentral ng Pilipinas’ (BSP) rate-setting meeting on Thursday and amid growing external uncertainties.
The local currency closed at P53.1 versus the greenback yesterday, gaining 19 and a half centavos from the P53.295-per-dollar close on Monday.
The peso opened slightly stronger at P53.28 before peaking at P53.08. Its intraday trough, on the other hand, was at P53.30 versus the dollar.
Dollars traded grew to $738.7 million from $666.1 million on Monday.
A trader said there’s still uncertainty on whether the local central bank will continue to hike or hold interest rates.
“There’s a BSP rate decision on Thursday so the market is looking for that. So they’re trimming their position ahead of that. They’re looking that the BSP will hike, but they may follow the Fed[eral Reserve] so it can hold for now,” a trader said in a phone interview yesterday.
“If they hike rates, the dollar-peso may go down further so they’re still seeing the peso positive. But they are lightening their position as the BSP may still hike,” the trader said.
A BusinessWorld poll showed six of 11 economists expecting to hold interest rates, while the other five expect the BSP to hike rates by at least 25 basis points. The central bank has raised the policy rates by a cumulative 150 basis points since May.
The trader added that uncertainties surrounding the exit of the UK from the European Union supported the peso’s strengthening as markets are on a wait-and-see mode.
A second trader said in an email on Tuesday that the US-China trade conflict weighed on the dollar.
“The peso slightly gained strength as the greenback slightly weakened following risk-on sentiment in view of the resumption of US-China trade discussions which might ease friction caused by the trade war escalation.”
The trader added that the peso might weaken ahead of strong US inflation data. “Exchange rates are likely to move between P53.00 and P53.20 range.” — E.J.C. Tubayan

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