Peso ends flat on positioning ahead of break

THE PESO was steady against the dollar on Wednesday amid volatile trading and positioning by market players ahead of the Holy Week break.

The local unit ended the shortened trading week at P51.765 versus the greenback, flat from Tuesday’s close.

The peso opened the session weaker at P51.80 per dollar, even slipping to as low as P51.88 intraday. However, it recovered in the afternoon session, logging a high of P51.74 against the US currency.

Trading volume grew to $994.38 million from $810.45 million that switched hands the previous day.

A foreign exchange trader said the peso moved erratically within the day even as it closed flat from the previous session.

“Even though it was unchanged, we saw some volatility. Initially, it traded higher given some demand in the morning offshore,” the trader said in a phone interview.

“Most likely, people are positioning ahead of the long weekend. When it traded higher in the morning and all of the demand was already covered, they reinstated their short position at the higher level then push it lower.”

Local financial markets will be closed on Thursday and Friday for the Holy Week break. During the period, remittances abroad are expected to pile up, which can only be exchanged once the markets open on Monday.

“Given the long weekend, we can see accumulated flows, which will push dollar-peso [stronger] most likely this Monday,” the trader added.

Meanwhile, another trader said the peso was flat on Wednesday as market participants remained cautious ahead of key US economic data scheduled to be released later this week when local markets are closed.

“US retail sales report for March 2019 is expected to come out stronger from previous reading,” the second trader said in an e-mail.

Retail sales in the US unexpectedly fell 0.2% in February, a reversal from the previous month’s upward-revised 0.7% increase, as consumers reduced purchase of food, clothing and electronics among others. The economic data for the month of March will be released Thursday. — Karl Angelo N. Vidal