THE PESO recovered against the dollar on Tuesday following the resumption of trade talks between the United States and China as well as the country’s “slightly better” December trade data.
The local unit closed Tuesday’s session at P52.075 versus the greenback, stronger than the P52.11 finish last Monday.
The peso opened the session weaker at P52.185 per dollar, slipping to as low as P52.27 intraday. Meanwhile, it rebounded to close at its best showing for the day.
Trading volume picked up to $1.165 billion from the $1.14 billion that switched hands the previous day.
A foreign exchange trader said the peso traded mixed yesterday, as it weakened in the morning session only to bounce back.
“We saw some retracement for the dollar. It rallied overnight, but it retreated during Asia time,” the trader said in a phone interview.
Another trader said the peso said the local unit strengthened “on news of resumption of trade talks between the US and China.”
Negotiators from the US and China are meeting again in Beijing later this week to strike a trade deal before the March 1 deadline.
Preparatory talks were held ahead of the arrival Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
“The peso appreciated on… the upbeat Philippine trade report,” the trader noted in an e-mail.
The country’s trade deficit stood at $3.752 billion, narrowing from the $3.972 billion recorded a year ago, as imports and exports declined year-on-year by 9.4% and 12.3%, respectively.
For 2018, the trade balance posted a record-high $41.44 billion deficit, from the $27.38 billion in 2017 and $26.702 billion in 2016.
“We had a slightly better trade balance on the back of falling imports. We saw a positive peso after that, but when it came out, it was pretty much ignored,” the first trader added.
For today, the second trader expects the peso to trade between P51.90 and P52.10, while the other gave a P51.90-P52.30 range. — Karl Angelo N. Vidal