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Peso briefly touches P51:$1 level

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THE PESO declined against the dollar on Monday, even as it brushed the P51 to $1 level intraday, as investors flocked to safer currencies amid uncertainty in the trade negotiations between the United States and China.

The local currency ended yesterday’s session at P52.11 versus the greenback, four centavos weaker than the P52.07 finish last Friday.

The peso opened the session slightly weaker at P52.11 per dollar, slipping to as low as P52.125 intraday. Meanwhile, its best showing for the day stood at P51.91 against the US currency.

Trading volume thinned to $1.14 billion from the $1.233 billion tallied during the previous session.

A foreign exchange trader said the peso depreciated slightly against the greenback, even as it swung wildly intraday.

“Market players just reversed their short dollar-peso position, that’s why we saw a weaker close,” a trader said in a phone interview Monday.

He added that the dollar recovered in the afternoon session as investors keep a close eye on trade negotiations between the US and China.

President Donald J. Trump on Thursday denied he will meet his Chinese counterpart Xi Jinping ahead of the March 1 deadline of its 90-day truce, reversing his previous statement that they will meet to resolve any final issues in the trade deal.

If no deal is reached before March 2, Mr. Trump will proceed with increasing tariffs to 25% from 10% on $200 billion worth of Chinese goods.

“That, I think, should give a bit of support to the dollar in general,” the trader said. “That’s why we’re seeing the dollar strengthen versus other major currencies.”

However, he noted that the peso strengthened in the morning, touching the P51-per-dollar level, given that local yields were “kind of attractive.”

“The central bank decided to keep its rates steady, so yields were kind of attractive. That made the peso kind of attractive as well.”

The Bangko Sentral ng Pilipinas decided to keep its borrowing costs steady during the policy meeting of the Monetary Board on Thursday, given that inflation is projected to return to below four percent in the coming months.

For today, two traders expect the peso to trade between P52 and P52.20. — Karl Angelo N. Vidal