Peso weakens amid lack of leads

THE PESO weakened against the dollar on Thursday as it consolidated due to risk-off sentiment amid geopolitical concerns abroad.

The local unit ended Thursday’s session at P53.80 versus the greenback, weaker than its P53.725-per-dollar finish last Wednesday.

The peso traded weaker the whole day, opening the session at P53.81 per dollar. It slipped to as low as P53.83 intraday, while its best showing for the day stood at P53.745 against the greenback.

Trading volume thinned to $667.1 million from the $707.05 million that switched hands the previous day.

Foreign exchange traders said the peso continued to move sideways against the dollar as investors await for stronger signals to trade on.

“The peso just traded within a tight range. Actually, there’s no direction. We’re continuing to trade sideways and looking for the next direction,” the first trader said in a phone interview yesterday.

As second trader concurred, saying the pair consolidated “since there is no headline for the dollar-peso” on Thursday.

Meanwhile, a third trader said the peso weakened “due to safe-haven demand toward the greenback on dampened market sentiment amid European political turmoil.”

In a radio interview, Deputy Prime Minister Matteo Salvini said Italy will not change its 2019 budget as the government insisted on the expansionary budget which raises the deficit next year to 2.4% of gross domestic product (GDP) from a 1.8% target for this year, according to a Reuters report.

This, as the European Commission rejected the government’s fiscal plan, giving Rome three weeks to present a new one.

“We saw a little bit of risk-off mode, I guess. But the move was not that significant,” the first trader said.

For Friday, the first trader expects the peso to move between P53.70 and P54.05 versus the dollar, while the other gave a P53.75P53.90 range.

“The peso might strengthen in view of likely softer than expected US third-quarter GDP growth rate report this week,” the third trader added in an email, giving a P53.70-P53.90 trading range for today.