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Peso up as EU seals Brexit deal

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PHILSTAR/KRIZ JOHN ROSALES

THE PESO regained its strength against the dollar on Monday amid less safe-haven currency demand amid geopolitical developments in the European Union (EU).

The peso ended Monday’s session at P52.35 versus the greenback, 10 centavos stronger than the P52.45 finish last Friday.

The local unit opened the session slightly stronger at P52.42 versus the dollar, reaching an intraday high of P52.35. On the other hand, its worst showing stood at P52.465.

Dollars traded on Monday climbed to $755.4 million from the $655.24 million tallied in the previous session.

A trader said in an e-mail that the peso strengthened amid reduced demand on safe-haven currencies such as the dollar after the Britain’s proposed departure from the EU was approved by the 27 leaders of the political bloc.

Reuters reported that the EU formally endorsed a treaty setting terms for the United Kingdom’s withdrawal in March, with European Commission President Jean-Claude Juncker saying those who think rejecting the deal to get better ones “will be disappointed.”

Another trader said the peso traded in a tight range against the dollar amid offshore selling as well as buying by agent banks.

“The offshore selling, I think, was triggered by the dollar index trading lower, so they’re just mimicking the dollar movement,” the trader said in a phone interview, adding that the peso lagged behind Asian currencies yesterday.

“The US dollar was generally weaker,” UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion said. “The market seems to be taking a cue from the reduced expectations of a faster-paced monetary policy tightening in the US.”

Another trader said there was intervention from the local central bank, which caused the peso to trade within a tight range.

For Tuesday, the first trader expects the peso to trade between P53.25 and P52.45 versus the dolalr, while the second gave a P52.30-P52.50 range. — K.A.N. Vidal with Reuters