THE PESO strengthened against the dollar on Wednesday driven by political and economic developments abroad.
The local unit closed the first session of the year at P52.515 versus the dollar, 6.5 centavos stronger than its P52.58-per-greenback finish last Dec. 28, 2018.
This was the peso’s best close in almost a month or since it ended at P52.32 per dollar last Dec. 3.
The peso opened Wednesday’s session at P52.50 versus the US currency, which was also its best showing for the day. Meanwhile, it slid to as low as P52.63 per dollar intraday.
Trading volume thinned to $580.05 million from the $664.4 million that switched hands last week.
A foreign exchange trader said in a phone interview that the peso strengthened versus the dollar in the morning session, mimicking the strength of other emerging market economies on the back of “strong US-China news.”
In a congratulatory message on Tuesday marking the 40th anniversary of Sino-US diplomatic relations, Chinese President Xi Jinping told US President Donald J. Trump that cooperation is the best choice for both countries, Reuters reported.
The world’s two biggest economies agreed last month to a 90-day temporary ceasefire in imposing tit-for-tat levies against each other’s imports.
Officials from Washington are also reported to travel to Beijing early this month to discuss trade-related concerns to the Chinese government.
“After that, the news turned negative [which was about] the decline in growth worldwide,” the trader added.
Meanwhile, another trader attributed the peso’s strength to the uncertainty in the US due to its government’s shutdown, which weighed on the dollar.
“[The shutdown] strengthened demand on other safe-haven demand such as the yen,” the trader added in a text message.
For today, the first trader sees the peso moving between P52.55 and P52.75 versus the dollar, while the other gave a P52.40-P52.50 range.
“The local currency might find more boost on bets of softer Philippine inflation data,” the second trader noted.
Meanwhile, other Asian currencies fell on Wednesday, shrugging off broad US dollar weakness as gloomy factory surveys added to worries about cooling regional and global growth.
Leading declines in the region, the Indonesia rupiah dropped 0.% to 14,475.00 per dollar. The currency weakened about 6% against the greenback in 2018. — Karl Angelo N. Vidal with Reuters