Peso falls against dollar

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peso remittance
THE PESO Is expected to trade between P52.30 and P52.50 today. — PHILSTAR/KJROSALES

THE PESO plunged against the dollar on Thursday from its eight-month highs, as investors cut their short dollar positions amid geopolitical developments in the United Kingdom and the United States.

The local unit closed the session at P52.41 against the dollar on Thursday, down 28 centavos from the P52.13-per-dollar finish on Wednesday.

The peso opened the session weaker at P52.15 versus the dollar, its best showing for the day. Meanwhile, it traded to as low as P52.46 intraday.

Dollars traded surged to $932.22 million from the $679.2 million that switched hands the previous day.

A foreign exchange trader said the peso slumped versus the dollar as market players cut their short greenback position.

“We broke past the resistance levels at around P52.31-P52.35. When we broke past those, we saw the market cut their position,” the trader said in a phone interview.

“When we broke the P52.35 level, it signified that the market is ready to cut their losses at that point.”

The trader added that the peso movement yesterday was “headline-driven,” particularly the developments in the UK’s exit from the European Union as well as the partial US government shutdown.

British Prime Minister Theresa May won a confidence vote in the Parliament on Wednesday amid an impasse on the Brexit agreement, Reuters reported.

Meanwhile, US President Donald J. Trump on Wednesday enacted a law granting some 800,000 federal employees back pay amid the partial government shutdown as he continued to demand funding to build a border wall.

“We still see momentum pushing the dollar higher. There might be some consolidation at current level, but the trend is still pointing for a stronger dollar,” the trader said.

Meanwhile, another trader said in an e-mail the peso depreciated against its US counterpart amid heightened tensions between the US and China after news that the US authorities are in advanced stages of a criminal probe against Chinese tech giant Huawei.

For today, the two traders expect the peso to trade between P52.30 and P52.50. — Karl Angelo N. Vidal