THE PESO slipped further against the dollar on Tuesday as investors stayed on the sidelines ahead of the inauguration of the incoming president of the United States on Wednesday.

The local currency shed 0.3 centavo to close at P48.078 versus the dollar on Tuesday from its P48.075 finish on Monday, data from the Bankers Association of the Philippines showed.

The peso started the session stronger at P48.06 per dollar. It weakened to as lows as P48.082 while its intraday best was at P48.055 against the greenback.

Dollars traded increased to $650.6 million yesterday from $418.7 million on Monday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the sideways movement of the peso versus the dollar to the inauguration of US President-elect Joseph R. Biden, Jr. and Vice-President-elect Kamala G. Harris on Wednesday.

“The peso exchange rate is little changed as the markets are anticipating Biden’s inauguration on Jan. 20, Janet Yellen confirmation and signals on the policy on US dollar, US stimulus,” Mr. Ricafort said in a Viber message.

A trader shared the same view, adding “the local currency might remain contingent on political developments surrounding the US presidential inauguration.”

The dollar dropped on Tuesday as investors prepared for US Treasury Secretary nominee Janet Yellen to talk up the need for major fiscal stimulus and commit to a market-determined exchange rate when she testifies later in the day, Reuters reported.

Mr. Ricafort added that markets are also waiting for the latest local trade deficit data. The Philippine Statistics Authority will report the December and full-year 2020 trade data on Thursday.

He expects the peso to trade within a tight range of P48.05 to P48.10 against the greenback on Wednesday, while the trader sees it settling between P48 and P48.20. — B.M. Laforga with Reuters