Peso ends flat on profit taking
THE PESO moved sideways yesterday amid mixed global developments, which was capped by profit taking as well as quiet trading as financial markets in the United States went on a holiday.
The local unit closed at P51.165 versus the dollar on Monday, barely changed from the P51.17 rate logged last Aug. 31.
The peso opened weaker at P51.20 against the greenback and even touched P51.25 as its intraday trough. It hit P51.15 as its best showing for the day.
Traders interviewed yesterday attributed the exchange rate movement to “mixed signals” from abroad, with the initial weakness drawn from geopolitical tensions in the Korean peninsula.
“The peso traded higher this morning on the back of increasing tensions in Korea. From there, trading was quiet,” one trader said in a phone interview on Monday.
North Korea conducted its sixth and most powerful nuclear test on Sunday as it reportedly detonated an advanced hydrogen bomb for a long- range missile, Reuters said in a report, which was initially thought to be a strong earthquake. Foreign countries including the US condemned Pyongyang’s latest actions, which intensified global tensions.
Most Asian currencies were largely subdued on Monday, with the exception of the won, after North Korea’s bomb test.
The trader noted that the quiet trading also came as US financial markets remain closed on Monday in observance of Labor Day.
Dollars traded on Monday totalled $428.65 million, lower than the $494.5 million that exchanged hands the previous day.
“The peso opened weaker due to North Korea’s nuclear program, but the decline was minimal due to downbeat US labor reports last Friday. Profit taking finally gave the peso a slight end-of-day gain,” a second trader added.
The US Labor Department reported that the economy created 156,000 new jobs last month. The economy created 399,000 jobs in June and July.
On the other hand, unemployment went up to 4.4% while average hourly earnings rose three cents or 0.1% after advancing 0.3% in July.
The first trader expects the peso to trade within P51-P51.30 against the dollar today, with developments in North Korea as well as upcoming policy decisions by the European Central Bank and the Reserve Bank of Australia to drive market dynamics.
On the other hand, the second trader sees the local currency trading within P51.05 to P51.25 versus the greenback.