THE PESO climbed on Wednesday on news of fresh trade talks between the US and China.
The local unit ended at P52.15 versus the greenback on Tuesday, up 3.5 centavos from its P52.185-per-dollar close on Monday.
The peso opened the session stronger P52.12 versus the dollar. It dropped to as low as P52.25, while its best level for the day was logged at P52.12 against the greenback.
Dollars traded on Tuesday inched down to $1.225 billion from the $1.258 billion seen on Monday.
“The peso appreciated from market optimism after US Secretary Steven Mnuchin confirmed the resumption of scheduled trade discussions between the US and China in two weeks’ time,” a trader said in a phone call.
US Treasury Secretary Steven Mnuchin said on Monday that he and US Trade Representative Robert Lighthizer would meet with Chinese Vice Premier Liu He for trade talks in two weeks.
Meanwhile, Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said traders continued to price in the anticipated cut in benchmark rates when the Bangko Sentral ng Pilipinas (BSP) reviews policy this week.
“Latest signals from BSP Governor [Benjamin E.] Diokno about unlikely RRR (reserve ratio requirement) cut on Sept. 26 amid expected 0.25-bp cut in local policy rates may have also supported the peso,” Mr. Ricafort said in an email.
Asked if the BSP will cut the RRR alongside the expected reduction to policy rates, Mr. Diokno told reporters at the sidelines of Euromoney’s Philippine Investment Forum in Makati on Tuesday, while noting the planned RRR cut is “is always in the agenda” despite having no definite schedule.
For today, the trader expects the peso to move within the P52.10-P52.30 range versus the dollar, while RCBC’s Mr. Ricafort sees it trading around P52.00 to P52.30. — L.W.T. Noble with Reuters