Peso drops anew as dollar stages rebound

THE PESO weakened anew against the dollar on Tuesday from a onemonth high on the back of quiet trading after market players sought for major global and domestic catalysts and after the greenback rebounded across the board.

The local currency closed at P50.185 versus the dollar yesterday from its P50.09 finish on Monday, which was a one-month peak.

The peso opened Tuesday’s session at its best showing for the day of P50.10 versus the foreign currency, while its intraday trough was seen at P50.195 per dollar.

Traders said the dollar recovered versus a basket of currencies after the US Federal Reserve’s decision to raise interest rates last week.

“The dollar recovered across the board even against majors and other currencies. We saw the dollar paring its losses these past few days,” one trader said in a phone interview yesterday.

The greenback dropped against the dollar in the past few days after US central bank raised interest rates at the close of its two-day Federal Open Market Committee (FOMC) meeting last Wednesday by 25 basis points to 0.75% to 1% for the second time in three months or since it tightened policy rates last December.

“There was also not a lot of volume, we saw minimal trading since I think market is awaiting fresh leads to dictate the movement of dollar- peso. So trading was just sideways and in consolidation,” the trader said.

Dollars traded dropped on Tuesday, with total volume coming in at only $289.5 million from the $441.3 million that changed hands the previous session.

Asked what possible catalysts could move the foreign exchange market, the trader said, “Any comments coming from [US President] Donald [J.] Trump, economic data and even domestically — any political or economic development will play a part in determining the direction of dollar peso.”

On a similar note, another trader said, “The market’s reaction to the Fed has lapsed, so now they’re looking for possible catalysts in the market.”

The trader said some factors to watch for the moment is the Bangko Sentral ng Pilipinas’ Monetary Board meeting tomorrow and data on domestic inflation.

For Wednesday, one trader said the pair’s trading may play between P50.10 and P50.30- to- the- dollar while the other trader sees the peso moving within P50 to P50.25 against the dollar for the whole week.