THE PESO is seen to strengthen against the dollar this week on the back of upbeat expectations on US-China trade talks.
The local unit stood unchanged on Wednesday at P51.765 versus the greenback, as market players positioned ahead of the Holy Week break.
Week on week, the peso climbed from the P51.90-per-dollar finish last April 10.
Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc., said the peso will likely strengthen mainly due to “the positive perception about the resolution of the trade issues between the US and China.”
Reuters reported that US President Donald J. Trump on Wednesday said Thursday that Washington and Beijing were nearing to strike a trade deal, which could be announced within four weeks.
A market analyst said the greenback may shed some of its gains towards the end of the week on the back of the positive developments on the US-China trade agreement as well as likely weaker US housing data and gross domestic product growth.
“[T]he first-quarter expansion of the US economy is seen to decelerate down to a 1.8% pace from a growth of 2.2% in the fourth quarter of 2018,” the analyst said in an e-mail. “These reports…could revive investors’ appetite for riskier currencies like the peso,”
However, the market watcher noted that the dollar is expected to appreciate today amid safe-haven buying following soft manufacturing reports from Japan, France and Germany, as well as the upbeat pronouncements of a US Federal Reserve official.
For this week, the analyst expects the peso to move between P51.40 and P52.10, while Mr. Asuncion gave a P51.60-P51.90 range.
The analyst said the dollar’s projected decline could be reversed by negative developments in the US-China talks or hints of a cut from the local central bank. — K.A.N. Vidal