THE PESO climbed against the dollar amid hints of positive developments in the US-China trade talks.
The local unit finished trading at P50.58 against the greenback on Tuesday, appreciating by 5.5 centavos from its P50.635-per-dollar close on Monday, according to data from the Bankers Association of the Philippines.
The peso opened the session at P50.60 versus the dollar. Its weakest showing was at P50.625, while its strongest was its close of P50.58 against the greenback.
Dollars traded went up to $670.14 million from $502 million on Monday.
Positive sentiment from trade deal developments was the major factor for the day’s foreign exchange movement, according to economists.
“The peso ended stronger primarily because of the trade deal positive sentiment. It is expected that markets will continue to build on the positive gains of the said phase 1 of the agreement,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a text message.
“The peso exchange rate closed stronger…its strongest in more than a month amid continued positive reaction to the phase one US-China trade deal,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
Reuters reported US National Economic Council Director Larry Kudlow had said that the phase one deal between the US and China has been “absolutely completed.”
“They’re…going to double our exports to China,” he said in an interview with Fox News Channel.
Asked if officials still planned to sign the deal the first week of January, Mr. Kudlow said: “That’s the hope.” Translations were still being worked out but he did not expect any changes to the final Phase One agreement, he added.
For today, both Mr. Asuncion and Mr. Ricafort expects the peso to move within P50.40-P50.70 against the dollar.
Meanwhile, the South Korean won firmed sharply on Tuesday, supported by easing trade tensions with Japan and strong demand for local chip stocks, while most other Asian currencies were subdued as investors sought clarity on the Sino-US trade deal. — LWTN with Reuters