THE PESO traded sideways versus the dollar yesterday as markets took a wait-and-see stance on the path of Treasury yields in the United States as well as geopolitical tensions.
The local unit closed at P52.285 against the greenback, barely changed from its P52.29 finish on Tuesday.
The peso opened weaker at P52.37-per-dollar and touched P52.40 as its intraday peak. The currency rebounded to P52.22 as its strongest showing during Wednesday’s session before settling at the closing rate.
Traders interviewed yesterday said the sideways move reflected investor caution amid emerging developments in the global financial markets.
One trader said the fresh pickup in yields on US Treasuries provided a lift to the dollar the other day, while expectations that this trend will persist kept the peso down.
“We are consolidating… The fundamentals continue to point to a weaker peso,” the trader said in a phone interview, noting that the peso remains “pressured” amid higher inflation, rising oil prices, and a current account deficit.
The dollar hovered on a five-month high against most Asian currencies yesterday as the benchmark ten-year US Treasury yields surged above three percent, Reuters said in a report.
Geopolitical concerns are also keeping investors jittery apart from rising US Treasury rates, another trader pointed out.
“The peso moved sideways [yesterday] amid mixed signals on geopolitical uncertainties concerning Iran and North Korea,” the second trader said via e-mail.
“The local currency might remain sideways as investors would likely to remain cautious amid likely mixed US economic data tonight and possible developments in geopolitical concerns.”
The Iranian government spoke out against new sanctions imposed by the United States following the latter’s withdrawal on the 2015 nuclear deal, dubbing it as a move to influence remaining signatories of the agreement.
Wednesday also saw North Korea say it may reconsider a summit with US President Donald J. Trump and called off another round of high-level discussions with South Korea.
Dollars traded yesterday amounted to $862.9 million, lower than the $1.352 billion that switched hands the other day. The first trader said Wednesday’s trading was largely driven by market selling rather than an intervention form the central bank.
For today, the first trader expects the peso to move within the P52.20-P52.50 range, while the other trader sees the currency within P52.20 to P52.40. — Melissa Luz T. Lopez