Peso strengthens to three-month high

THE PESO continued to strengthen against the dollar on Tuesday to hit its highest level in three months despite a quiet market ahead of the long weekend as investors remain bullish on the country’s economic outlook and with some cautious prior to the release of data on US inflation.

The local currency closed at P49.635 against the greenback yesterday, gaining seven centavos from its P49.705 finish on Monday.

Yesterday’s close is also the peso’s best showing in three months or since its P49.48-per-dollar finish last Jan. 12.

The local unit is also in the green for the year from its end2016 close of P49.72 against the greenback.

The peso opening Tuesday’s session at P49.64. Its worst showing was at P49.75 against the foreign currency, while its peak was at P49.605-per-dollar.

Dollars traded, however, dropped to $577 million on Tuesday from the $1.12 billion seen the previous session.

One trader said despite the local currency gaining against the dollar yesterday, the market was relatively quiet and the peso ended stronger versus the greenback due to profit taking.

“Nothing really happened yesterday and since the peso was at its highest on Monday, there was a lot of profit taking,” the trader said in a phone interview.

“Markets were also quiet since most traders are in vacation mode already ahead of the long weekend,” the trader added.

Local markets will be closed on April 13-14 in observance of Maundy Thursday and Good Friday.

Meanwhile, another trader said on Tuesday: “The peso appreciated today still because of optimism on the country’s prospects and caution ahead of the US inflation report, which will be released during the long weekend.”

For today, one trader said the peso- dollar pair may move within the P49.60 to P49.80 range while the other trader sees the peso playing between P49.60 and P49.75-per dollar.

“The peso might move sideways with a downward bias, as there might be some correction in the market after the dollar’s drastic decline,” one trader noted.

Other Asian currencies were subdued on Tuesday as geopolitical risks dampened risk appetites and dented assets such as regional equities. —