THE PESO will likely strengthen further on the back of remittances for holiday spending and as US President Donald J. Trump said they are close to signing the phase one of Washington’s trade deal with Beijing.
The local unit closed at P50.83 against the greenback on Dec. 23, shedding 1.5 centavos from Friday’s finish of P50.815 a dollar, according to data from the Bankers Association of the Philippines.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort attributed the peso’s movement last Monday to new leads regarding the trade deal between the world’s two biggest economies.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said profit taking before the Christmas break may have dominated the market.
For today, RCBC’s Mr. Ricafort said a major factor for a stronger peso would be the inflows of foreign currencies converted and accumulated for spending on Christmas and New Year.
“Any window-dressing activities as the account yearend draws closer would have a positive impact on the local financial markets, including the peso,” he added.
For his part, UnionBank’s Mr. Asuncion said the market will keep an eye out for developments related to the phase one deal of US and China.
“The details of the phase one of the US-China trade deal has been trickling out and provides many insights into the future of trade between the two biggest economies. Market has been positive and upbeat about these,” he said.
Mr. Trump said on Tuesday that he and Chinese President Xi Jinping will have a ceremony to sign the first phase of their trade deal agreed to this month, Reuters reported.
“We will ultimately, yes, when we get together. And we’ll be having a quicker signing because we want to get it done. The deal is done, it’s just being translated right now,” Mr. Trump said.
For today, RCBC’s Mr. Ricafort sees the peso moving within the P50.60-50.90 range, while UnionBank’s Mr. Asuncion expects the exchange rate to settle within the P50.50-50.80 band. — LWTN with Reuters