Peso up on US trade talks
THE PESO strengthened a tad against the dollar on Thursday as risk appetite improved on the back of trade negotiations between the United States and Canada.
The local unit closed Thursday’s session at P53.43 versus the greenback, three centavos stronger than the P53.46-per-dollar finish on Wednesday.
The peso opened the session stronger at P53.43 versus the dollar, climbing as high as P53.405 intraday. Its worst showing for the day stood at P53.485 against the US currency.
Dollars traded slipped to $501.28 million from the $527.3 million that exchanged hands the previous day.
A foreign exchange trader said the peso mostly moved sideways, tracking the dollar.
“The peso is still range-bound as we tracked the move of the dollar for the day since we’re not anticipating any key data,” the trader said by phone.
Reuters reported that the dollar index was at its one-month low of 94.52 against a basket of major currencies as some investors bet a likely trade deal between the United States and Canada.
“The peso appreciated amid market optimism on a possible trade deal between US and Canada with the two countries starting their discussion [on Wednesday],” another trader said in an e-mail.
US President Donald J. Trump and Canadian Prime Minister Justin Trudeau expressed confidence that they could reach a new deal on the North American Free Trade Agreement (NAFTA) by Friday.
“We recognize that there is a possibility of getting there by Friday, but it is only a possibility, because it will hinge on whether or not there is ultimately a good deal for Canada,” Mr. Trudeau said.
Canada rejoined the talks to overhaul the 24-year-old NAFTA after the US and Mexico reached a bilateral deal on Monday.
“The main contribution of the trade negotiations for the peso would be the risk-on sentiment it brought,” the first trader said.
For Friday, the first trader sees the peso moving between P53.30 and P53.55 against the greenback, while the other gave a P53.35-P53.55 range.
“The local currency, however, might erase some of its gains ahead of major economic data from the US which might be favorable towards the greenback,” the second trader noted.