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Peso inches down ahead of break

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Peso Dollar

THE PESO closed almost flat on Thursday despite news of US President Donald J. Trump being impeached by the US House of Representatives as investors were cautious with the year coming to an end.

The local unit closed at P50.635 against the greenback on Thursday, shedding less than a centavo from its P50.631-per-dollar close on Wednesday, according to data from the Bankers Association of the Philippines.

The peso opened the trading session at P50.61 against the dollar, which was also its intraday high. Its weakest showing was at P50.665.

Dollars traded climbed to $998.7 million from a volume of $762.1 million on Wednesday.

Despite news on the impeachment case versus Mr. Trump, a trader said the peso continued to move sideways due to the quiet trading usually observed during the holidays.

“This mood of quiet trading will push through until the end of the year with banks already closing their books. They will not risk bigger moves as they wrap up their transactions,” the trader said in a phone call.

According to the trader, the news on Mr. Trump’s impeachment did little to affect currency movements as the markets will also “watch out for the case’s move to the Senate, which is a “Republican majority.”

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the impeachment news is a “potential source of market volatility” which “partly caused some profit taking in some global financial markets.”

“Peso was [also] marginally weaker today after the latest net foreign portfolio investments data…,” he said in a text message on Thursday.

Reuters reported that on Wednesday, the US House of Representatives passed two articles of impeachment against Mr. Trump which sets the stage for a trial next month in the Senate, which is a “friendlier terrain for Trump.” This would determine whether he will be convicted and removed from office.

At home, the Bangko Sentral ng Pilipinas reported that foreign portfolio investments or hot money saw a net outflow of $345.26 million in November, a reversal of the net inflow worth $104.53 million seen in the preceding month.

For today, the trader gave a forecast of P50.55-50.75, while Mr. Ricafort sees the peso trading at a range of P50.40-50.70. — L.W.T. Noble with Reuters





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