Peso flat amid continued geopolitical tensions
THE PESO strengthened a tad yesterday as the market was cautious over geopolitical concerns involving US, Iran and North Korea ahead of key US economic data.
The local currency closed at P52.27 versus the greenback on Thursday, gaining one-and-a-half centavos from the P52.285 close on Wednesday.
The peso strengthened at the open to P52.20 per dollar, but weakened to as low as P52.34 during the day. It logged an intraday high of P51.18 against the greenback.
Dollars traded stood at $687.8 million, down from the $ 862.9 million recorded the previous day.
A trader said the market remains cautious over developments between the US and Iran after President Donald J. Trump withdrew with the 2015 nuclear deal, as well as the US’ scheduled talks with North Korea next month on denuclearization, amid threats the latter will cancel.
Another trader said apart from geopolitical concerns, the market was waiting for fresh leads while US bond yields continue to rise.
“The peso closed relatively unchanged again today amid lingering geopolitical concerns on Iran and North Korea along with rising US Treasury yields, prompting investors to remain on the sideways due to lack of strong leads from the market,” the second trader said in an e-mail.
US Treasury yields rose on Wednesday as the 10-year yield reached seven-year highs and tested key technical support at 3.10%, which may touch off another wave of bond sales if it rises much further above that level.
Wednesday’s yield increase followed Tuesday’s bond market sell-off spurred by signs the US economy is on a stronger footing in the second quarter.
“There’s no data really. More on broad dollar moves. So far, the dollar is just moving sideways, and will be sustained,” the first trader said. “No data to look forward to… there might be some selling for dollarpeso ahead of the weekend.”
The second trader meanwhile said on Thursday the market is “likely to monitor the release of US initial jobless claims data this evening for possible cues to the dollar-peso market tomorrow.”
The first trader sees a P52.20 to P52.30 range for today, while the second trader said the local currency will likely trade between P52.15 and P52.35 versus the dollar.