Peso con­tin­ues to weaken on con­sol­i­da­tion

Business World - - BANKING & FINANCE - Janine Marie D. Soli­man

THE PESO fur­ther de­clined against the dol­lar for a fourth straight day amid con­sol­i­da­tion and as mar­ket play­ers re­main on the look­out for eco­nomic de­vel­op­ments.

The peso closed at P49.83 against the green­back on Thurs­day, drop­ping by 10.5 cen­tavos from its P49.725 fin­ish on Wed­nes­day.

The lo­cal cur­rency opened yes­ter­day’s ses­sion at P49.80 ver­sus the for­eign cur­rency, while its best show­ing for the day was seen at P49.77 per dol­lar. Its in­tra­day trough was at P49.87 against the green­back.

Dol­lars traded jumped to $582.3 mil­lion on Thurs­day from the $436.5 mil­lion that changed hands the pre­vi­ous ses­sion.

“The dol­lar closed higher af­ter the peso even­tu­ally ap­pre­ci­ated last week when it hit a low of P49.40, which some­how be­came the sup­port level,” one trader said in a phone in­ter­view.

“[T]here’s been some de­mand for dol­lars. At the same time the rally in the stock mar­ket seemed to be stalling and there’s also some net for­eign sell-off that added to the de­mand for dol­lars, so I guess that caused slight weak­ness at its close,” the trader added.

The trader said geopo­lit­i­cal noise abroad has sim­mered down and the dol­lar’s strength against the peso is more of a con­sol­i­da­tion.

“Bar­ring any ex­ter­nal forces, there’s re­ally no news that could have caused the dol­lar to go higher,” the trader said.

In con­trast, an­other trader said the dol­lar’s ap­pre­ci­a­tion against the peso was still due to safe- haven buying amid geopo­lit­i­cal con­cerns in France and ten­sions be­tween the United States and North Korea.

Asked how the peso fared against its re­gional peers, the trader said even other Asian cur­ren­cies just traded side­ways against the dol­lar.

“So tech­ni­cally in­vestors are just wait­ing since there’s no eco­nomic data to trig­ger the mar­ket. They’re wait­ing what the out­come will be on the French elec­tion and how the ten­sion be­tween North Korea and the US will de­velop,” the trader noted.

For Fri­day, one trader sees the peso play­ing be­tween P49.60 and P49.90 against the dol­lar while the other trader said the pair may trade within P49.70 to P49.90.

Most other Asian cur­ren­cies also fell on Thurs­day, as traders pared back bets ahead of the French pres­i­den­tial elec­tion, while weak US data, and ten­sions around the North Korea con­flict added to un­cer­tainty.

France’s pres­i­den­tial elec­tion is be­ing closely watched as the stakes for in­vestors are high, with two anti-Euro­pean Union, antieuro can­di­dates among the four seen still in con­tention to make it to a sec­ond round two weeks af­ter Sun­day’s bal­lot.

The dol­lar in­dex fur­ther weighed on emerg­ing mar­ket cur­ren­cies, creep­ing up by just 0.06% in Asian trad­ing on Thurs­day, against a bas­ket of six ma­jor ri­vals.

The Malaysian ring­git fell 0.02% ver­sus the US dol­lar, while the Tai­wan dol­lar dropped to 30.423 ahead of ex­port or­ders data.

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