Peso rebounds ahead of GDP

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THE PESO recovered ahead of Philippine economic growth data. — PHILSTAR/KRIZ JOHN ROSALES

THE PESO recovered against the dollar on Thursday from a one-month low the previous session following a negative development in US-China trade talks and amid market optimism due ahead of the release of the Philippine economic growth data.

The local unit ended Wednesday’s session at P52.75 versus the greenback, 18 centavos stronger than the P52.93-per-dollar finish last Tuesday.

The peso traded stronger the whole day, opening the session at P52.83 per dollar. It climbed to as high as P52.72, while its intraday low stood at P52.87 against the US currency.

Trading volume thinned to $994.29 million from the $1.234 billion that switched hands the previous day.

A foreign exchange trader said the peso corrected against the dollar following days of trading weaker after the US was reported to cancel a trade planning meeting with China.

CNBC earlier reported that the US rejected to meet with Chinese officials this week due to disputes over intellectual property rules.

If no deal is reached before the 90-day truce ends on March 2, Mr. Trump will proceed with slapping increased tariffs to 25% from 10% on $200 billion worth of Chinese goods.

“I think the issues that brought the dollar weaker versus major currencies include the concerns over the US-China trade negotiations as well as weak housing data in the US,” the trader said in a phone interview.

“The reality is that we’re seeing data to be quite negative, given that we haven’t resolved major issues such as [partial US government] shutdown and trade war, all things point to a quite some correction.”

Meanwhile, another trader said in an e-mail that the peso regained strength yesterday due to profit-taking amid market optimism ahead of the release of the fourth-quarter gross domestic product (GDP) growth data today.

A BusinessWorld poll of 16 analysts yielded a median GDP growth estimate of 6.3% for both the fourth quarter and 2018. The full-year projection was below the 6.7% pace recorded in 2017, as well as the 6.5-6.9% target of the government for 2018.

For today, the first trader expects the peso to trade between P52.65 and P53 versus the dollar, while the other gave a P52.60-P52.90 range. — KANV