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Peso drops due to upbeat US data

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THE PESO ended its rally against the dollar on Friday due to upbeat US economic data as well as profit-taking.

The local currency finished at P50.37 against the greenback yesterday, ten centavos weaker from its P50.27 close on Wednesday.

The peso traded weaker the whole day, opening the session at P50.33, while its intraday high was seen at P50.27. Its worst showing for the day was its closing rate.

Dollars traded depleted to $444.70 million on Friday from $728.90 million in the previous session.

Traders attributed the weakening of the peso to upbeat economic data in the US.

“The peso depreciated today, following a string of generally positive US data on [third-quarter] GDP (gross domestic product) growth, PCE (personal consumption expenditures) inflation personal spending and personal income,” Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines, said in an e-mail.

The US economy grew by 3.3% in the third quarter, the fastest in three years.

Meanwhile, another trader noted that the dollar’s ascent was pushed by some profit-taking, as well as the weak performance of the local bourse.

“Peso finally weakened at the start of the month likely due to some profit-taking from short dollar position. We also saw some risk-off sentiment brought about by send-off in local equities, strengthening the dollar,” a trader said.

However, Mr. Dumalagan added that the better performance of the dollar was tempered by the growing concerns on the US tax reform.

“The weakening of the peso was capped by concerns about the US tax bill after the planned US Senate vote was delayed,” Mr. Dumalagan said. — Karl Angelo N. Vidal

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