THE PESO climbed against the greenback on Tuesday amid expectations of a gradual reopening of the economy and profit taking.
The local unit ended trading at P50.53 per dollar yesterday, stronger by 17 centavos from its P50.70 close on Friday, according to data from the Bankers Association of the Philippines.
Markets were closed on Monday for Eid’l Fitr.
The peso opened Tuesday’s session at P50.68 per dollar. Its weakest showing was at P50.70 while its intraday best was at its close of P50.53 against the greenback.
Dollars traded went down to $491.5 million from the $675.1 million logged on Friday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso was supported by positive sentiment on prospects of a gradual reopening of the economy through the lifting of some restrictions.
“The peso was stronger after recent signals from government officials that Metro Manila to be brought to GCQ (general community quarantine) from MECQ (modified enhanced community quarantine),” Mr. Ricafort said in a text message.
Government officials are expected to decide this week on whether or not to lift restrictions in areas that are still under MECQ or ECQ.
Meanwhile, a trader said the stronger peso was on the back of profit taking.
“The peso appreciated as participants took profit following the safe-haven demand for the greenback from the continuing geopolitical tensions between the US and China over the proposed security law on Hong Kong,” the trader said in an e-mail.
Reuters reported that Chinese and Hong Kong officials on Monday defended their proposed national security laws.
“The legislation will alleviate the grave concerns among local and foreign business communities about the violent and terrorist forces,” Xie Feng, China’s Foreign Commissioner in Hong Kong said on Monday at a briefing.
The US Senate has introduced a bill to sanction Chinese officials for stepping on Hong Kong’s autonomy through the security law. The said legislation will also slap sanctions for banks that do business with entities found violating the law guaranteeing Hong Kong’s autonomy.
For today, Mr. Ricafort gave a forecast range of P50.40 to P50.65 while the trader expects the local unit to trade between the P50.40 to P50.60 levels. — L.W.T. Noble with Reuters