THE PESO weakened against the dollar on Thursday amid “muted” trading as market players await catalysts.
The local currency closed Thursday’s session at P52.60 versus the greenback, down five centavos from the P52.55 finish on Wednesday.
The peso opened the session at its intraday high of P52.50 per dollar, while its worst showing stood at P52.695 versus the US currency.
Trading volume thinned to $1.202 billion from the $1.755 billion that switched hands the previous day.
A foreign exchange trader said the peso moved within a small range yesterday.
“Trading was somehow muted [on Thursday] as market players saw agent banks again selling heavy amount of dollars,” the trader said.
The trader added that the peso weakened even as the dollar also declined against major currencies overnight.
Reuters reported that the dollar index was up 0.1% yesterday to 96.633 versus a basket of currencies yesterday.
“I guess market players were just looking for drivers at the market, waiting for further news of what’s to come or what will drive the dollar-peso higher or lower,” the trader said.
Meanwhile, another trader said the peso depreciated on market risk-off sentiment following the weaker-than-expected US producer inflation and durable goods data, as well as the uncertainty on the Brexit deal which heightened fears of a further global growth slowdown.
In a 312-308 vote, members of the British parliament rejected the idea of leaving the European Union without a deal, as they are set to vote on whether the United Kingdom will ask the economic bloc to delay the March 29 departure.
The trader added that the Bangko Sentral ng Pilipinas (BSP) “seemed to intervene” at the P52.70 level.
As the country’s monetary authority, the BSP sometimes conducts “tactical interventions” to temper any sharp swings that may cause the peso to appreciate or depreciate.
For today, the first trader expects the peso to move between P52.40 and P52.85 versus the dollar, while the other gave a P52.50-P52.70 range.
Most other Asian currencies also weakened against the dollar on Thursday, as investors grappled with a slew of economic data from the region’s largest trading partner, China, while uncertainty over a US-Sino trade deal continued to weigh on risk appetite.
China’s industrial output fell to a 17-year low in the first two months of the year, data showed on Thursday, while investment picked up speed as the government fast-tracked more road and rail projects as they work to avert a sharper slowdown.
Among the regional players, currencies that are more sensitive to trade tensions such as the Singapore dollar weakened 0.2%, while the South Korean won edged lower. — K.A.N. Vidal with Reuters