THE PESO rebounded against the dollar on Monday as banks pocketed gains ahead of the Holy Week break.
The local currency closed at P52.215 against the greenback yesterday, 17 centavos higher than the P52.39 finish on Friday.
The peso traded stronger the whole day, opening the session at P52.37-per-dollar, which was also its intraday low. Its best showing, meanwhile, was at P52.21 versus the greenback.
Dollars traded slipped to $690.9 million from the $701.2 million traded on Friday.
A trader said in a phone interview that banks reduced their long dollar positions to take profit.
“Peso appreciated today as investors started to close their foreign exchange positions ahead of the Holy Week trading break towards the end of the month,” a trader said in an e-mail on Monday.
On Thursday and Friday, foreign exchange trading will be suspended due to the Holy Week holidays.
Another trader attributed the stronger peso to profit taking following the local currency’s plunge before the weekend.
“The peso moved [higher] steadily throughout the day. I think banks are just taking profit following the [plunge] last Friday,” the trader said in a phone interview.
Last week, the local currency dipped to P52.39 as President Donald J. Trump slapped new tariffs on Chinese goods worth about $50 billion following a seven-month investigation into alleged intellectual property theft.
In response, China’s top economic leader warned US Treasury Secretary in a phone call that they are ready to protect its national interest.
The phone call was made after Beijing said in a Web post that they might impose tariffs on 128 American products to counter the measure done by Washington.
In a previous interview, a trader said the fears of an impending trade war between the world’s two biggest economies created a “risk-off sentiment that affected the Asian currencies.”
However, Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, said yesterday that the tension “somehow subsided” and “has been muted,” adding that this may continue in the following days.
For today, the first trader sees the peso moving between P52 and P52.30, while the second trader gave a forecast range of P52.15 to P52.35.
“The peso is expected to strengthen amid possible continuous closing of foreign exchange positions amid lack of anticipated market movers within the week,” the first trader noted.
Most emerging Asian currencies also edged higher on Monday as trade tensions faded slightly after South Korea was exempted from US steel tariffs and a media report said quiet negotiations between China and the United States have begun.
Emerging currencies received a boost from the news the United States had agreed to exempt South Korea from its steel tariffs.
South Korea is the third-largest steel exporter to the United States and the world’s top importer of Chinese steel. — Karl Angelo N. Vidal with Reuters