THE PESO strengthened on Thursday amid risk-on sentiment following the passage of a US legislation supportive of Hong Kong’s autonomy.

The local unit closed at P50.705 versus the greenback on Thursday, climbing by 9.5 centavos from the P50.80-a-dollar finish on Wednesday, based on data from the Bankers Association of the Philippines.

The peso opened at P50.82 against the dollar. Its weakest point for the day was at P50.87, while its strongest was at P50.70.

Dollars traded grew to $1.045 billion from the $858.25 million posted on Wednesday.

A trader said there was risk-on sentiment in the market which boosted the peso.

“The peso closed stronger on the back of positive risk sentiment despite the news of US supporting Hong Kong. The market took it as a good news in the absence of a strong statement from the side of China,” the trader said in a phone call.

The said development is a proof of the “resilience” of the peso, according to UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion. He added that the absence of fresh leads due to the US holiday supported the peso.

“There was not much going on due to the Thanksgiving break, but the news that [US President Donald J.] Trump has signed the Hong Kong bill increasing the US’ scrutiny of the city-state’s trade status with the biggest economy in the world. This was essentially negative to the market, but the peso was resilient..,” Mr. Asuncion said in a text message.

Reuters reported that the legislation backing Hong Kong by requiring the State department to certify at least annually that the special administrative region keeps “enough” autonomy to justify favorable trading terms with the US which aided it in maintaining its position as a financial hub.

Aside from this, the law, which was unanimously approved in the US Senate and by all except one in the House of Representatives, also provides sanctions for human rights violations in Hong Kong which has been in the midst of political unrest for the past four months.

“I signed these bills out of respect for President Xi [Jinping], China, and the people of Hong Kong. They are being enacted in the hope that Leaders and Representatives of China and Hong Kong will be able to amicably settle their differences leading to a long term peace and prosperity for all,” Mr. Trump said in a statement, according to the Reuters report.

Before this, Mr. Trump had been vague on whether he would sign or veto the law, while trying to strike a trade deal with China.

For today, the trader gave forecast range of P50.65-50.85, while Mr. Asuncion sees the peso playing around the P50.70-50.90 band. — L.W.T. Noble with Reuters