Peso weakens further
THE PESO weakened anew against the dollar yesterday as markets remained cautious ahead of US President-elect Donald J. Trump’s inauguration on Friday and due to investor fears over a “hard Brexit.”
The peso ended at P49.86 versus the greenback on Monday, 22 centavos lower compared to its finish of P49.64 on Friday’s session.
The local unit opened the session at P49.78 against the greenback. Its intraday low was at P49.89 per dollar while its peak for the day was booked at P49.76.
Dollars traded on Monday totalled $ 464.1 million, climbing from the $411.1 million that changed hands in the previous session.
“The peso depreciated due to caution ahead of the US presidential inauguration. Investors are betting that President-elect Donald Trump would provide details about his fiscal plans for the US economy,” a trader said in an e-mail yesterday.
Mr. Trump will be inaugurated as the new US President on Jan. 20. Analysts and economists have attributed to Mr. Trump negative market sentiment seen recently, especially after the US Presidentelect failed to provide details on his planned policies during his news conference last week.
Meanwhile, another trader said in a phone interview yesterday that the local unit declined against the dollar due to markets focusing more on the ‘Brexit,’ or Britain’s exit from the European Union. “The ‘ Brexit’ concern is the possible ‘ hard Brexit,’ but it’s ahead of the speech of UK Prime Minister Theresa May’s speech,” the trader said.
For today, one trader said the pair may move within the P49.75 to P49.95 range, while the other trader said the peso may trade at P49.70 per dollar.
“The peso might correct slightly due to profit taking, but the peso’s appreciation might be minimal due to lack of fresh leads,” one trader said.
Asian currencies fell on Monday, as investors awaited comments from Federal Reserve officials this week and Mr. Trump’s inauguration for clues on the outlook for US policies and the dollar.
The downturn in Asian currencies came on a day when the dollar climbed against sterling. The British pound dived after media reports that the British government is prepared to make a “hard” exit from the European Union.