Peso strengthens against dollar after Macron win
THE PESO opened the week stronger against the US dollar on the back of positive market sentiment after Emmanuel Macron’s victory in the French presidential election.
The local unit closed at P49.86 against the greenback on Monday, five centavos more than its P49.91 finish on Friday.
The currency traded broadly sideways after it opened the session at P49.88 versus the dollar. Its intraday trough was seen at P49.89 against the foreign currency, while its best showing for the day was at P49.80 per dollar.
Dollars traded on Monday went down to $410.5 million, from the $443.7 million that changed hands in Friday’s session.
Traders attributed the bullish sentiment of market players to the victory of Mr. Macron, a centrist, over far-right nationalist candidate Marine Le Pen in France’s presidential election on May 7.
“The peso appreciated today, as risk appetite improved after pro-European Union candidate Emmanuel Macron defeated Marine Le Pen in the second round of the French presidential election,” one trader said in an e-mail on Monday. Reuters reported that Mr. Macron won the French presidential election after he garnered around 65.5% more votes versus Ms. Le Pen’s 34.5%.
“The peso’s appreciation was relatively minimal due to upbeat US labor reports last Friday,” the trader added.
Latest data from the US government on Friday bared nonfarm payrolls climbing to 211,000 jobs in April from the 185,000 projected by the market, according to Reuters. Joblessness slid to 4.4% last month.
Similarly, another trader said by phone on Monday: “The market closed lower today due to the victory of Macron. Market players also downplayed higher US jobs data released on Friday, so their optimism was due to Macron’s victory.”
“Since Macron’s victory was a risk- on for the market, equities and regional currencies were both up,” the trader added.
For Tuesday, one trader said the pair may trade within P49.75 to P49.95 range while the other trader said the peso may play within P49.70 to P50 against the dollar.
“The peso might move sideways, with a downward bias, as strong US labor data and expectations of an upbeat US inflation report could increase the chances of a US rate hike in June 2017,” one trader noted. —