Peso ends higher on profit taking
THE peso started the week stronger against the dollar on Monday on the back of profit taking and as some corporates serviced their obligations, but with local markets remaining quiet ahead of the US Federal Reserve’s policy meeting.
The local unit closed at P50.325 to the dollar yesterday, three-and-a-half centavos stronger than last Friday’s close of P50.36 versus the greenback.
The peso traded stronger for the day. It opened the session at P50.28 versus the dollar and its intraday trough was just at P50.33. Its peak for the day was at P50.27 against the greenback.
Traders attributed the local currency’s strength against the greenback yesterday to profit taking among players.
“The peso appreciated [ yesterday] primarily because of profit taking ahead of the US monetary policy meeting. [ Yesterday’s] movement followed the trend in the US last Friday evening,” a trader said in an e-mail.
The US central bank will hold its policy meeting on March 14-15. Investors are now pricing in more than a 90% chance that authorities would hike interest rates anew this week after its last move in December 2016.
Meanwhile, another trader said in a phone interview on Monday: “It was a very quiet market, we saw lower volume since nothing much happened but there was a bit of profit taking after the US jobs data was released last Friday.”
Dollars traded on Monday dropped to $233.4 million compared to the $304.55 million that changed hands last week.
Data released by the US Labor Department last Friday showed non- farm payrolls soared by 235,000 jobs in February on the back of the construction sector’s surge in nearly ten years to 58,000, its largest gain since March 2007.
“Our guess is, the only reason why we closed stronger against the dollar was probably because there was a bit of corporate demand that went through the market, but other than that, it’s not an eventful day,” the trader noted.
For Tuesday, one trader sees the peso playing at P50.20-P50.40 against the greenback while the other trader said the local currency may move within P50.25P50.40 until Wednesday.
“Before the actual meeting of the Fed and their announcement, the peso may just trade back and forth against the dollar,” one trader said.
Another trader said, “The peso might move sideways [today], as investors might remain on the sidelines ahead of the interest rate decision of the US Federal Reserve.”