THE PESO recovered versus the dollar on Thursday, even as it moved in a tight range ahead of the policy meeting of the European Central Bank (ECB).
The local unit closed yesterday’s session at P51.11 against the greenback, 6.5 centavos stronger than its P51.175-per-dollar finish on Wednesday.
The peso traded in a tight range, opening the session at P51.14 per dollar. It strengthened to as high as P51.07, while its worst showing stood at P51.15 against the US currency.
Trading volume thinned to $831.85 million from the $1.167 billion that changed hands the previous day.
A trader attributed the stronger finish of the peso to the continuation of profit-taking, which pushed the pair to end Wednesday’s trading session near its intraday high.
“Still, the dollar-peso traded on a tight range mainly because of the market is being cautious ahead of the ECB meeting,” the trader said on Thursday.
The ECB was expected to trim policy rates by 10 basis points during its policy meeting to ease the effects of trade tensions globally and pale inflation in the Eurozone.
The central bank’s meeting comes days ahead of the similarly crucial meeting of the US Federal Reserve, wherein they are also expected to ease monetary policy.
“The peso strengthened from market optimism on reports that a US delegation will be heading to Shanghai as US-China trade discussion resumes,” another trader said in an e-mail.
Officials of China and the US are set to meet in the Chinese financial capital next week to restart trade talks, weeks after US President Donald J. Trump and Chinese President Xi Jinping agreed to continue their negotiations.
Despite the resumption of cabinet-level trade talks, market watchers are not expecting any major development in the meeting.
For today, the first trader expects the peso to trade between P51.05 and P51.25, while the other gave a P51-P51.20 range. — KANV