Peso weakens vs dollar

THE PESO opened the week lower against the dollar yesterday, erasing a five-month high seen a week ago, on the back of consolidation and after market players took profit on the greenback amid persisting political noise offshore.

The peso closed at P49.54 against the foreign currency on Monday, sliding by 11 centavos from its P49.43 finish on Wednesday, which was the local currency’s best showing in nearly five months or since its P49.35-perdollar finish last Nov. 16, 2016.

The market was closed on April 13-14 in observance of Maundy Thursday and Good Friday.

The local currency opened Monday’s session at its peak for the day of P49.45. Its intraday trough was at P49.60 against the dollar.

Volume of dollars traded dropped to $346.3 million from the $ 788 million that changed hands the previous session.

Traders attributed the peso’s decline against the greenback to the dollar’s correction after the local currency’s appreciation last week.

“The peso depreciated today, as the dollar bounced back after last week’s significant decline,” one trader said in an e-mail on Monday.

Another trader said in a phone interview: “This is a very, very good technical bounce as some banks took the opportunity to take profit on the greenback due to the technical nature of the peso’s recent rally after it broke a few supports last week.”

On a similar note, another trader said, “A lot of the movement is still due to market positioning given the fact we’ve seen the peso playing catch up after it went very week last month.”

“The pair has its own movement now as it’s trying to consolidate. Whatever the trend is in the region or in the US dollar, eventually we have to follow suit,” the trader added.

The local currency gained against the greenback for three consecutive trading days last week amid the market’s positive view on the Philippine economy and ahead of the long weekend in observance of the Holy Week.

However, one trader noted: “We saw profit taking and maybe this is due to the risk-off of the market on the geopolitical situations happening around the world.”

The trader was referring to political noise in Syria, North Korea and Afghanistan against the United States.

Similarly, the other trader said, “Geopolitical concerns abroad, particularly in France and Afghanistan, might have also weakened the peso by reducing investors’ appetite for riskier currencies in favor of the safer US dollar.”

For Tuesday, one trader sees the peso playing between P49.40 and P49.70 against the dollar while the other trader said the pair may trade within P49.30 to P49.70. Another trader said the local currency may fall within P49.40 to P49.60 per dollar. “The peso might depreciate, as there might be some safe-haven buying in the market due to geopolitical concerns abroad,” one trader said.