THE PESO strengthened against the dollar on Monday as the market was optimistic on developments in US-China trade relations.
The local unit ended yesterday’s session at P52.33 versus the greenback, 10 centavos stronger than the P52.43-per-dollar finish last Friday.
The peso traded stronger the whole day, opening the session at P52.34 per dollar. It climbed to as high as P52.30 intraday, while its worst showing stood at P52.38 against the US currency.
Trading volume stood at $816.3 million, slightly higher than the $756.9 million that changed hands in the previous session.
“The peso appreciated amid market optimism on the current US-China trade discussions,” a trader said in an e-mail.
Following the high-level meetings between US and Chinese officials last week in Beijing, the negotiations are set to continue in Washington this week, with President Donald J. Trump saying the country is close to having a “real” trade deal.
Mr. Trump also mentioned the possibility of an extension to the March 1 deadline of its truce with China.
Meanwhile, another trader said in a phone interview that the peso strengthened as market participants stayed on the sidelines ahead of economic events later this week.
“Dollar-peso was somehow on the sideways only given the tight range. We are still waiting for the events coming on Wednesday until Friday,” the trader said.
On Wednesday, the US Federal Reserve will release the minutes of its Jan. 29-30 meeting, where it kept its borrowing costs steady between 2.25% and 2.5%.
Following the meeting last month, the US central bank said it will be patient in tweaking its benchmark rates as it will assess actual and expected economic conditions.
Meanwhile, Fed officials Loretta J. Mester and Raphael W. Bostic are expected to deliver “potentially cautious” remarks later this week, which might weaken the dollar.
For today, the first trader expects the peso to trade between P52.25 and P52.45, while the other gave a P52.25-P52.50 range. — K.A.N. Vidal