Peso rises to P51:$1 level
THE PESO climbed further against the dollar, closing the session at the P51 level, ahead of a meeting between the United States and North Korea.
The local unit closed the session at P51.91 against the dollar on Wednesday, up 11.5 centavos from its P52.025 finish on Tuesday.
This is the peso’s best finish in more than nine months or since it ended at P51.80 versus the dollar on May 10, 2018.
The peso opened the session stronger at P52 per greenback, dropping to as low as P52.08 intraday. However, it recovered to reach an intraday high of P51.905 before settling at its close.
Dollars traded soared to $1.147 billion from the $909.11 million that switched hands in the previous session.
A foreign exchange trader said the peso saw “very erratic” trading yesterday given the wide range.
“The dollar-peso traded in a very choppy manner. There were so many factors, including the meeting of [President Donald J.] Trump and [North Korean leader] Kim Jongun, as well as the issue between Pakistan and India,” the trader said in a mobile phone message.
“The positive outlook on their meeting may improve risk appetite among investors, as it may bring stability in the Korea and in Asia.”
Mr. Trump was set to meet Mr. Kim in Hanoi, Vietnam yesterday night for their second summit. Mr. Trump has said he will convince Mr. Kim to abandon the country’s nuclear program.
Meanwhile, tensions between India and Pakistan escalated after the Pakistani foreign ministry claimed to have shot down two Indian fighter jets.
Another trader attributed the stronger peso to the congressional testimony of US Federal Reserve Chair Jerome Powell.
Mr. Powell echoed his previous statements, saying that the central bank will be “patient” in its monetary stance while acknowledging some “conflicting signals” despite lingering strength in the US economy.
For today, the first trader expects the peso to move between P51.90 and P52.10 versus the dollar, while the other gave a P51.80-P52 range.
“With the break of P51.90, the next level of support should be near the P51.70 level,” the first trader noted.