Peso ascends as Trump pulls US out of TPP deal
THE PESO continued to move higher against the dollar yesterday after the greenback dropped against a basket of currencies due to global uncertainties made worse by unclear remarks from US President Donald J. Trump.
The peso ended at P49.81 versus the greenback on Tuesday six centavos higher than its P49.87 finish after Tuesday’s session.
The local unit traded better against the greenback the entire session after it opened at P49.80 per dollar. Its intraday low was logged at P49.845, while its best showing for the day was recorded at P49.78 versus the foreign unit.
Dollars traded on Tuesday totalled $ 624.9 million, climbing from the $ 513 million that changed hands in the previous session.
Traders said that the peso climbed after the dollar weakened across the board as market players are still awaiting clearer statements from Mr. Trump about his plans for the US economy.
“The dollar traded lower the other night against major and regional currencies after investors are trying to see what really are the economic policies of Trump,” one trader said.
Reuters reported that the 45th President of the US reaffirmed his promise of trimming taxes and easing regulations on Monday and formally withdrew the country from the Trans- Pacific Partnership ( TPP) trade deal on Monday, distancing America from Asian allies.
Another trader said the dollar moved lower due to Mr. Trump’s comments on the TPP.
For today, one trader said that the peso may move within P49.70 to P49.90 against the greenback while the other trader said that the local unit could hit P49.70 against dollar.
“The Philippines’ gross domestic product ( GDP) growth to be released on Thursday will be the next market driver for the pair,” one trader said.
The Philippine Statistics Authority is set to release the country’s economic growth for the fourth quarter and full-year 2016 tomorrow.
Asian currencies also rose on Tuesday, as the dollar was dented by concerns over Mr. Trump’s protectionist trade stance and investors awaited more details on his fiscal policy plans.
The South Korean won touched its highest level in nearly seven weeks at 1,160.8 per US dollar. The won later came off that high and stood at 1,165.6 in onshore trade. Elsewhere, the Taiwan dollar touched a high of 31.306, its best level since early October. The Thai baht touched a high of around 35.19.
The dollar is likely to head lower in the near term given the potential for dollar-selling by local exporters ahead of the Lunar New Year holidays, Seoul-based traders said.
Adding to pressure against the dollar, Trump’s nominee for Treasury Secretary Steven Mnuchin was quoted by Bloomberg as saying that an excessively strong dollar was negative in the short term.
The dollar could continue to capitulate lower, if the market continues to be fed protectionist headlines from the US administration while details of the much heralded fiscal stimulus remain scant, Emmanuel Ng, foreign exchange strategist for OCBC Bank, said in a research note.
The rise in Asian currencies came as the dollar wallowed near seven-week lows against a basket of six major currencies. The dollar index stood at 100.07, having slipped to 99.899 on Monday, its lowest level since Dec. 8.
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