THE PESO fell on Monday as the dollar strengthened over the long weekend following positive retail sales data in the United States.
The local unit closed yesterday’s session at P52.04 versus the greenback, down 27.5 centavos from last week’s P51.765-per-dollar finish.
The peso opened the session a tad stronger at its intraday high at P51.75 per greenback. However, it declined within the day to finish closer to its intraday low of P52.10 against the dollar.
Trading volume declined slightly to $976.9 million from $994.38 million that switched hands the previous session.
Foreign exchange traders said the local unit fell versus the dollar after the US currency improved while financial markets locally were closed for the Holy Week break.
“The peso was pushed weaker by the higher dollar index move over the weekend and possible short position covering by the banks,” a trader said in a phone interview Monday.
“We saw also positive us economic data over the weekend, that’s why the dollar index rose.”
Retail sales in the US surged 1.6% in March, a reversal of the 0.2% decline the previous month and marking its best reading since September 2017, boosted by increased spending on cars, gasoline, clothing, and furniture.
“The peso weakened following the stronger-than-expected US March 2019 retail sales report last week which has renewed views of the lingering strength in the US economy and provided broad boost towards the greenback,” another trader said in an e-mail.
The first trader added that the dollar strengthened as the euro fell on increased risk appetite from investors, fuelled by the developments in the US-China trade negotiations.
US President Donald J. Trump said on Thursday that Washington and Beijing are close to striking a trade deal, which could be announced within four weeks.
For today, the first trader expects the peso to move between P51.80 and P52.20, while the other gave a P51.90-P52.20 range.
“The local currency might weaken further ahead of likely similar rebound in US durable goods orders,” the second trader noted. — K.A.N. Vidal