Peso up as Trump offers little clarity on policies
THE PESO rebounded against the dollar yesterday following US President-elect Donald J. Trump’s speech that did not align with market’s expectations of clarifications in planned policies for the US economy.
The peso ended at P49.48 versus the greenback on Thursday, 14.5 centavos higher compared to its finish of P49.625 on Wednesday’s session.
The local unit opened the session at P49.545 against the greenback. Its intraday low was at P49.59 per dollar before closing at its peak for the day.
Dollars traded on Thursday totalled $ 588.7 million, climbing from the $529.9 million that changed hands in the previous session.
Traders said the peso strengthened against the dollar due to Mr. Trump’s speech that gave no clarity on his planned fiscal stimulus for the US economy.
“The peso appreciated today, contrary to expectations, after US President-elect Donald Trump gave few clarifications about his proposed tax reforms and infrastructure spending plans,” a trader said in an e-mail on Thursday.
Market players were disappointed with Mr. Trump’s news conference on Wednesday as he failed to provide details on his future plans of boosting fiscal spending and trimming taxes. It was Mr. Trump’s first news conference since the Nov. 8 election.
On a similar note, another trader said: “The peso strengthened due to a generally weaker dollar driven by more on Mr. Trump’s speech where he didn’t say much regarding his fiscal policies.”
Asked how the peso fared against other regional currencies’ performance versus the greenback, the trader said: “The dollar was generally lower against Asians and other majors.”
For today, one trader said the pair may move within the P49.35 to P49.65 range, while the other trader said the peso may trade between P49.45 and P49.65 per dollar.
“The peso might depreciate anew as likely weak Chinese trade data could fuel safe-haven buying,” one trader noted.
Meanwhile, asked what other developments could contribute to the pair’s trading today, the other trader said US Federal Reserve Chair Janet Yellen’s speech last night could affect foreign exchange markets.
Fed Chair Yellen hosted a town hall meeting with educators in Washington overnight. Asian currencies rose broadly on Thursday in the wake of the US Presidentelect’s news conference, which offered little clarity on his future fiscal policies and disappointed dollar bulls.
The Thai baht climbed to around 35.30 at one point, its strongest since mid-November. Traders said the baht rose due to short-covering, and was also supported by inflows into Thai equities.