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Peso surges against dollar ahead of year’s close

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1000 peso bills

THE PESO climbed against the dollar on Thursday as banks continued to build their peso holdings ahead of another long holiday break.

The local unit closed Thursday’s session at P52.665 versus the greenback, 19.5 centavos stronger than the P52.86 finish last Friday.

The peso opened the session weaker at P52.90 versus the greenback. It dropped to as low as P53 yesterday before rallying to close at its high. Dollars traded yesterday rose to $807.45 million from the $726.55 million that switched hands last Friday.

A trader said the peso strengthened as the market positioned ahead of the year’s close.




“The peso opened quite high, but it quickly dropped to the P52.70 level before 10:30 a.m.,” the trader said.“We have four days of weekend, so the market is covering for remittance flows coming in over the long weekend.”

Meanwhile, another trader said the peso “found some risk-off boost” from positive developments in US-China trade relations.

Officials from Washington are reported to travel to Beijing in early January to discuss trade-related concerns to the Chinese government, Bloomberg reported on Wednesday.

During the meeting of US President Donald J. Trump and his Chinese counterpart Xi Jinping last month in Argentina, the leaders agreed to take a pause in imposing tariffs against each other’s goods, with the US postponing its levies on Chinese imports until March 2.

The trader said the local currency also gained strength after the US economic managers assured investors that Federal Reserve Chairman Jerome Powell will remain in his post following rumors of his possible removal.

For today, the first trader expects the peso to trade between P52.40 and P52.80 versus the dollar, while the other gave a slimmer range of P52.50-P52.70. — K.A.N. Vidal