Peso rises ahead of Fed
THE PESO strengthened slightly against the dollar on Tuesday as investors were still on the sidelines ahead of the monetary policy meetings of the US Federal Reserve and Bangko Sentral ng Pilipinas (BSP).
The local currency finished at P52.08 against the dollar yesterday, gaining two centavos from its P52.10 close on Monday.
The peso traded within the range the whole day, opening flat at P52.10 versus the dollar. Its intraday low stood at P52.15, while its best showing was at yesterday’s close.
Dollars traded slightly decreased to $456.2 million yesterday from the $480.3 million that changed hands in the previous session.
“[Yesterday] was super quiet. We traded within the range so nothing new,” a trader said in a phone interview.
“We’re only maintaining the range trade and we’re still waiting for the [Bangko Sentral ng Pilipinas (BSP)] Monetary Board that’s why expect the few days to be quiet for the dollar-peso.”
Economists expect the Fed to hike its interest rates by 25 basis points during its two-day meeting, which started last night. Market player are also waiting for some clues as to how many tweaks the US central bank will make thereafter.
Locally, seven out of 12 economists polled by BusinessWorld said the BSP’s policy-setting Monetary Board will keep rates steady on Thursday.
Meanwhile, another trader said the peso strengthened slightly as the dollar weakened following the upbeat euro.
“Peso closed stronger [yesterday] after positive developments on the Brexit trade agreement with the European Union (EU) and on news of hawkish cues from the European Central Bank (ECB) which temporarily made the euro and the sterling more attractive over the greenback,” the trader said. ECB policymakers are shifting their debate to the expected path of interest rates, sources told Reuters.
For today, the first trader sees the peso moving between P52 and P52.15, while the other trader gave a slightly wider range of P52 to P52.20.
“The local currency might weaken [today] ahead of the release of likely stronger US home sales data in view of the US Federal Reserve meeting on Thursday,” the second trader said. — Karl Angelo N. Vidal with Reuters
