Peso drops amid euro area jitters
THE PESO weakened anew against the dollar yesterday amid negative sentiment due to lingering political noise offshore, particularly in Europe, which caused the market to resort to safe-haven buying.
The local unit finished at P49.78 versus the greenback on Tuesday, nine centavos lower from Monday’s P49.69 close.
The peso opened almost flat at P49.70 per dollar. Its worst showing for the day was booked at P49.78 while its intraday peak was at P49.62 versus the foreign unit during Tuesday’s session.
Dollars traded on Tuesday went up to $ 548 million from the $ 365.9 million that exchanged hands the previous session.
Traders attributed the peso’s decline to the dollar’s strength against a basket of currencies amid political uncertainties in Europe.
“The peso depreciated today as a ripple effect of the euro’s decline against the dollar. Heightened political uncertainty because of various European elections this year raised doubts about the European Union’s stability,” one trader said on Tuesday.
Reuters reported that French National Front political party leader and candidate Marine Le Pen vowed to her supporters over the weekend that she would protect France versus globalization and Islamic fundamentalism, even promised of taking France out of the European union, if she be elected as French President in May.
Another trader said on Tuesday: “The dollar weakened overnight so we saw investors on a risk-off mode, but due to certain political issues in Europe, the dollar-peso traded lower.”
“We saw the dollar strengthen across the board. So far I think the market was on a riskoff mode so they bought the Japanese yen.”
The trader added that a lot of market players were buying the dollar towards the afternoon which caused the greenback to strengthen against the peso, but noted that it was “normal market activity.”
For today, two traders expect the pair to move within the P49.65 to P49.80 range, while the other trader said the peso will likely range at P49.65 to P49.85- to- a- dollar. •