Peso declines on profit taking

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THE PESO slipped on profit taking after last week’s rally.

THE PESO depreciated slightly against the dollar on Monday as market players took profit following the local unit’s rally last week.

The local currency closed at P51.72 versus the greenback yesterday, two centavos weaker than the P51.70-per-dollar finish on Friday.

The peso opened the session weaker at P51.765 against the greenback, slipping to as low as P51.84 intraday. Its best showing, on the other hand, stood at P51.68 against the dollar.

Trading volume grew to $1.094 billion from the $872.31 million that switched hands in the previous session.

“The peso made a new low this morning, although it continued to trade within a wide range. The trading was still erratic, although he offshore market was quite biddish,” a trader said in a phone interview on Monday.

“From our end, we saw inflows that supported the peso. The pressure for the peso to move higher comes from the offshore market.”

Another trader said the local unit weakened a tad as market players took the opportunity to pile up on the greenback following the previous week’s rally.

The peso rallied last week, reaching a nine-month high of P51.70 against the greenback, buoyed by optimism on US-China trade relations.

Late last month, US President Donald J. Trump postponed indefinitely the imposition of $200 million in tariffs on Chinese goods — originally scheduled to take effect on March 1 — citing “substantial progress” in Washington’s trade talks with Beijing.

Mr. Trump is set to meet with his Chinese counterpart Xi Jinping in Mar-a-Lago, Florida a few weeks from now to seal a trade deal.

For today, the first trader expects the peso to trade within P51.70 and P52 versus the dollar, while the other gave a P51.60-P51.80 range.

Most Asian currencies likewise were slightly weaker on Monday, with the exception of the Chinese yuan, as investors anticipated an imminent resolution to the US-China trade dispute and new policies from Beijing aimed at boosting Asia’s largest economy.

The yuan strengthened 0.3% to 6.691 per dollar on expectations that the United States and China were close to striking a deal to roll back tit-for-tat tariffs, paving the way to end a bitter year-long dispute.

Meanwhile, investors will also be closely watching China’s annual parliamentary meeting starting on Tuesday that may provide details on how Beijing plans to reignite its slowing economy as well as its economic growth targets over the year. — KANV with Reuters