THE PESO strengthened against the dollar on Wednesday on the back of profit taking ahead of the Holy Week break.

The local currency ended the session at P52.16, 16 centavos stronger than the P52.32-per-dollar finish on Tuesday.

The peso opened Wednesday trading weaker at P52.37, which was also its worst showing for the day. Its intraday high, meanwhile, stood at P52.15 versus the US currency.

Dollars traded rose to $878.5 million from the $718.9 million logged on Tuesday.

A trader said that the peso strengthened as banks took profit to cover demand for remittances during the Holy Week break.

“As expected, the peso moved higher due to remittance covering. We have a long weekend ahead so we saw some heavy selling especially towards the close,” the trader said in a phone interview.

Meanwhile, another trader said there were some heavy inflows ahead of the holidays.

“From the move today, as we noticed, there’s a little bit of volume today. From the move a while ago, I guess there’s inflow coming in,” the trader said on Wednesday.

“If I were to guess, probably it came from the rights offering of Metrobank (Metropolitan Bank & Trust Co.). But with the move today, that might be one of the reasons,” the trader added.

Metrobank is conducting a P60-billion rights offering to raise 799.8 million shares priced at P75 apiece until April 4.

The capital raising exercise will fund the lender’s loan growth as well as the full acquisition of its credit card arm Metrobank Card Corp. from ANZ Funds Pty. Ltd.

On the other hand, Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, said “the strength was due to a BSP (Bangko Sentral ng Pilipinas) intervention.” — K.A.N. Vidal