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Peso up on less safe-haven demand, profit taking

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THE PESO appreciated against the greenback on Thursday on the back of profit taking and less safe-haven demand for the dollar due to improving market sentiment.

The local unit closed at P49.365 per dollar on Thursday, gaining a centavo from its P49.375 finish on Wednesday, data from the Bankers Association of the Philippines.

The peso started the session at P49.45 versus the dollar, which was also its weakest showing for the day. Meanwhile, its intraday best was at P49.36.

Dollars traded dropped to $481.2 million from the $567.13 million seen on Wednesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the peso’s strength to gains in the US stock market, which reduced demand for the greenback.

“The peso closed stronger due to less demand for the US currency as a safe-haven investment in view of gains in the US stock market,” Mr. Ricafort said in a text message.

Wall Street ended higher on Wednesday after a see-saw session as investors digested mixed quarterly results and contentious stimulus negotiations in Washington, Reuters reported.

The major stock indexes oscillated for much of the day but ended in the black. The Nasdaq had the smallest gain, capped by a 1.2% drop in Amazon.com, Inc. shares.

The Dow Jones Industrial Average rose 165.44 points or 0.62% to 27,005.84; the S&P 500 gained 18.72 points or 0.57% to 3,276.02; and the Nasdaq Composite added 25.76 points or 0.24% to 10,706.13.

Meanwhile, a trader said the peso gained on profit taking.

“The peso appreciated from profit taking as the dollar initially surged after the US ordered the withdrawal of the Chinese consulate in Houston,” the trader said in an e-mail.

On Wednesday, the US State department said it is giving China 72 hours to close its Houston consulate due to accusations of spying. US President Donald J. Trump said the closure of more Chinese consulates was “always possible”.

For today, Mr. Ricafort gave a forecast range of P49.25 to P49.45 versus the dollar while the trader expects the local unit to move around the P49.35 to P49.55 band. — L.W.T. Noble with Reuters

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