THE PESO strengthened on Tuesday as tensions between the United States and Mexico eased following a deal on immigration policies.
The local currency closed at P51.85 on Tuesday, 25 centavos stronger than Monday’s P52.10-per-dollar finish.
The peso opened the session slightly stronger at P52.05 against the dollar. It climbed to as high as P51.84 during the session, while its worst showing was logged at P52.05 intraday.
Trading volume decreased to $867.45 million from the $1.02 billion that switched hands from the previous session.
“Peso [was] tracking the regional FX (foreign exchange) rally with risk sentiment repaired to some extent with Trump and Mexico coming to an amicable settlement,” ING Bank N.V.-Manila Branch senior economist Nicholas Antonio T. Mapa said in an e-mail.
A trader likewise attributed the peso’s climb from optimism on the back of the US-Mexico trade and migration deal signed on Friday.
Last month, US President Donald J. Trump threatened 5% tariffs on Mexican goods to be imposed on Monday. The duties would have increased every month until they reached 25% in October, unless Mexico stopped illegal immigration across its border with Mexico.
On Friday, the tariffs were called off, after the United States and Mexico announced an agreement on immigration. The joint communique issued by the two countries provided few details.
Critics have said there have been no new major commitments to slow the migration of Central Americans to the United States.
The agreement would expedite a program known as the Migration Protection Protocols, which sends people seeking asylum in the United States to wait in Mexico as their cases are processed.
That program, announced in December, would be expanded across the entire US-Mexico border under the terms of the agreement, according to the State Department.
The deal would also send the Mexican National Guard police force to its own southern border, where many Central Americans enter Mexico.
Mr. Trump on Monday hinted more details were to come about the migration pact, saying another portion of the deal with Mexico would need to be ratified by Mexican lawmakers.
“Participants remained cautious ahead of the US CPI (consumer price index) report due to be released during the Philippine Independence Day holiday,” the trader added.
The US CPI data will be released on the Bureau of Labor Statistics’ website on June 12.
Back home, the local market will be closed due to Independence Day holiday.
The trader expects the peso to weaken on Thursday on expectations of an upbeat US CPI report.
The peso-dollar rate might hover within the P51.70-52 range when the market reopens, the trader said. — with Reuters