THE PESO strengthened further against the dollar on Tuesday on heavy greenback selling ahead of the release of the minutes of the US Federal Reserve’s last policy meeting.
The local currency closed Tuesday’s session at P52.21 versus the greenback, 12 centavos stronger than the P52.33-per-dollar finish last Monday.
The peso opened the session slightly weaker at P52.34 versus the dollar, slipping to as low as P52.40 intraday. However, it recovered to close the session at its best showing.
Dollars traded grew to $885.6 million from $816.3 million in the previous session.
A foreign exchange trader said there was heavy dollar selling yesterday, bucking the downswing of the other currencies.
“We saw a lot of selling today despite the dollar gaining against most currencies. It’s a bit odd for us, because we didn’t see any strong flows in the market to justify the heavy selling interest,” the trader said in a phone interview on Tuesday.
He added that trading was “one-sided” for most of the day in favor of the local unit.
“Pretty much the movement of the global market is different from us, wherein we saw dollar buying the whole day. We’re the only one that’s strong.”
Meanwhile, another trader said the peso strengthened further as market participants took profit ahead of the release of the Fed minutes.
The Fed will release today the minutes of its Jan. 29-30 meeting, where it kept its borrowing costs steady between 2.25% and 2.5%.
“The local currency might appreciate further as global markets are expecting the Fed minutes to shed more light in its dovish communications from their January meeting,” the second trader said.
For today, the first trader expects the peso to trade between P52.10 and P52.35, while the other gave a slightly wider P52.10-P52.35 range. — K.A.N. Vidal