Peso climbs as worries over French polls ease
THE PESO gained versus the dollar on Tuesday, as more appetite was seen for the local currency ahead of the long weekend and as worries over the French presidential election eased.
The peso settled at P49.675 versus the dollar yesterday, 11 centavos stronger from its P49.785 finish on Monday.
The local currency opened Tuesday’s session sideways at P49.79 against the greenback. Its intraday trough was at P49.80 per dollar, while its peak for the day was at P49.64 versus the foreign currency.
Dollars traded reached $674.8 million, climbing from the $407 million that changed hands the previous session.
One trader attributed the peso’s strength to calmer markets amid geopolitical noise offshore, particularly in France.
“The peso appreciated today as risk aversion subsided after pro-European Union candidate, Emmanuel Macron, emerged as the frontrunner in the French presidential election,” the trader said in an e-mail on Tuesday.
Reuters reported that Centrist Emmanuel Marcon won the first round of voting against anti-EU candidate Marine Le Pen over the weekend, making the latter qualify for the May 7 runoff.
Another trader said in a phone interview: “We saw remittance banks selling off the dollar in anticipation for the long weekend.”
Malacañang declared April 28 as a special non-working holiday in Metro Manila for the 30th Association of Southeast Asian Nations Summit, which will be held in the capital today until April 30.
Local markets will also be closed on May 1, Monday, in observance of Labor Day.
“That’s basically it, and we also saw large volume so there’s more demand for the peso. More investors bought the peso at the same time sold the dollar. This is just normal when there’s a long weekend ahead,” the trader noted.
Today, one trader said the peso may play within P49.60 to P49.75 against the greenback while the other trader sees the pair trading between P49.50 to P49.80 range.
“The peso might depreciate slightly due to optimism ahead of US President [Donald J.] Trump’s tax reform proposal and caution ahead of the interest rate decisions of the BoJ (Bank of Japan) and ECB ( European Central Bank),” one trader said.
“The peso might just weaken slightly, as US reports on consumer confidence and new home sales are expected to come out softer than before,” the trader added.
Most emerging Asian currencies likewise rose against the US dollar on Tuesday as continued relief from the outcome of the first phase of French elections supported appetite for assets such as stocks and development market foreign exchange.
In Asia, the ringgit and rupiah moved higher after they reopened following market holidays. The ringgit was the region’s top gainer, hitting a five-month peak.
Meanwhile, the Taiwan dollar rose for a fourth session, while the Indian rupee was up 0.2%.
The dollar index , which measures the greenback against a basket of six major rivals, held steady at 99.141 at 0350 GMT.
“Asia FX ( foreign exchange) is generally benefiting from improved risk sentiment following the results of the first round of the French elections,” said Dushyant Padmanabhan, an FX strategist at Nomura.
“That said, there are still a number of investors concerns stemming from regional geopolitical worries and existent concerns over the impact of increasing protectionist US policy,” he said.
In a recent report, the International Monetary Fund warned that Mr. Trump’s proposed tax cuts and roll- back of financial regulations could spark a new round of financial risk-taking of the type that preceded the 2008 financial crisis.