THE PESO continued to gain against the greenback on Tuesday to hit its strongest level in more than a month on the back of bets of hawkish pronouncements from the European Central Bank (ECB) and amid a weak dollar across a basket of currencies caused by political noise in the US.

The local unit ended at P50.37 versus the dollar yesterday, adding 9 centavos from its P50.46-per-dollar close on Monday.

Yesterday’s close was the peso’s best in five weeks or since it finished at P50.29 versus the dollar last June 27.

The local currency was traded stronger versus the dollar for the whole session. It opened at P50.42 versus the dollar while its intraday low was just at P50.44 against the greenback. Its best showing for the day was at P50.36 per dollar.

Dollars traded on Tuesday, however, declined to $432.4 million from the $509.2 million that exchanged hands on Monday.

Traders attributed the peso’s gain versus the greenback to political uncertainties in the United States following US President Donald J. Trump’s removal of Anthony Scaramucci as White House communications director.

“We saw a weak dollar across the board due to Trump’s numerous hurdles, which caused negative sentiment among the market and resulted to a weaker dollar across,” one trader said by phone.

Reuters reported Mr. Trump fired Mr. Scaramucci on Monday after he was recently named as the White House communications director more than a week ago.

Aside from geopolitical noise in the US, the other trader said markets were also anticipating the result of the ECB’s meeting.

“The peso appreciated today due to political noise in the US and amid expectations of more hawkish moves from the European Central Bank,” the trader said by e-mail on Tuesday.

For today, traders expect the peso to move between P50.25 and P50.45 versus the dollar.

“The peso might appreciate amid likely soft US PCE (personal consumption expenditures) inflation data,” one trader said.

For its part, the research arm of Metropolitan Bank Trust & Co. (Metrobank) said in a report that they continue to see a weaker peso for the year, also taking its cue from other emerging-market currencies that will remain weak on the back of stronger US fundamentals and tighter US Federal Reserve policy.

“The peso’s performance in the coming months will largely be influenced by the still volatile global financial market and the government’s ability to execute its infrastructure spending plan.”

It noted the local currency could even breach the P51-a-dollar level this year due to a stronger dollar amid higher imports in the Philippines.

“More infra[structure] project rollouts would mean greater demand for the US dollar on even higher imports (increased imports of capital goods, most especially materials and equipment for construction), which in turn could mean the peso going beyond the P51:$1 level,” the report stated.

Researchers at Metrobank said the foreign exchange rate could settle at P51.30 per dollar by yearend. — Janine Marie D. Soliman