THE PESO CONTINUED to strengthen against the dollar on Monday on the back of optimism on a US-China trade deal.
The local unit finished trading at P50.50 against the greenback on Monday, appreciating by 24 centavos from the P50.74 per dollar close on Thursday.
The peso opened the session at P50.57 versus the dollar. Its weakest point for the day was traced at P50.60, while its intraday best was at P50.43 a dollar.
Dollars traded on Monday thinned to $869.5 million from $1.16 billion that changed hands last Thursday.
A trader said the peso’s gain against the dollar was supported by positive developments in the trade negotiations between the United States and China.
“The peso’s performance was on the back of risk-on sentiments arising from positive news on US-China trade talks. Any optimism will continue to be positive for emerging market economies and Asian currencies,” the trader said by phone.
Meanwhile, another trader said the peso’s strength was fuelled by possible inflows from foreign investors.
“The peso continued to gain on the back of possible inflows anchoring the back of the peso’s strength. Foreign funds are looking for relative values in terms of take-up, as other developed markets are already experiencing negative bond yields,” the trader said in a phone call.
US President Donald Trump on Friday suggested he could sign a long-awaited trade agreement with China in the farm state of Iowa, which has been hard hit by tariffs in a nearly 16-month trade war between the world’s largest economies.
Mr. Trump said on Friday evening that negotiations about a “phase one” agreement were going well and he hoped to sign the deal with Chinese President Xi Jinping at a US location when work on the agreement was completed.
“We’re looking at a different couple of locations. It could even be in Iowa,” he told reporters at the White House. “We’re discussing locations, but I like to get deals done first.”
The first trader sees the local unit trading within the P50.40-50.70 range versus the dollar today, while the second trader predicts it will play around the P50.50-50.70 band. — L.W.T. Noble with Reuters