Peso ends flat following positive US data, renewed trade tensions
THE PESO ended flat against the dollar on Thursday following upbeat US producer price data and renewed trade tensions between China and the US.
The local unit closed Thursday’s session at P53.50 versus the greenback, ending flat from its finish on Wednesday.
The peso opened the session slightly weaker at P53.55, which was also its intraday low. On the other hand, its best level for the day stood at P53.495.
Dollars traded rose to $595.3 million from the $355.9 million that switched hands the previous day.
A trader said the peso closed flat on Thursday due to profittaking by investors.
“The peso closed flat as investors took profits from the relatively stronger dollar during the day,” a trader said in an e- mail.
The trader added that investors pocketed gains following “the release of better- than- expected US producer prices report on Wednesday, along with the renewed escalation of US-China trade tensions.”
US wholesale prices posted the biggest year- on- year rise since November 2011, standing at 3.4%.
Meanwhile, the US threatened China to slap another 10% tariffs on $200 billion worth of Chinese goods. Beijing said the action was “completely unacceptable,” noting that it would complain to the World Trade Organization.
Another trader said Thursday’s trading was mostly driven by corporate demand.
“I think the trading [on Thursday] was corporate- driven. We saw some demand from oil companies,” the second trader said in a phone interview.
Rizal Commercial Banking Corp. Economist Michael L. Ricafort said: “The possible further hike in local policy rates may have caused relatively stable peso exchange rate versus the dollar recently.”
Previously, Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla, Jr. said the monetary authority will review and update its assessment and forecast inflation path.
Last month, inflation accelerated to a fresh five-year high of 5.2%, surging from May’s 4.6% figure and the 4.7% median forecast among economists in a BusinessWorld poll.
On Friday, the first trader sees the peso to move between P53.40 and P53.60, while the other gave a slightly tighter range of P53.40P53.55.
Most Asian currencies were also treading water on Thursday, as a cautious backdrop left investors uncertain about their bets a day after the latest US trade tariff threat had spread fresh tumult in financial markets.