THE PESO moved sideways against the dollar on Thursday due to growing concerns over the passage of the tax reform measure in the US.
The local currency closed at P51.27 against the greenback yesterday, gaining three centavos from its P51.30 finish last Wednesday.
The peso opened slightly stronger at P51.28 versus the dollar. Its best showing for the day was at P51.22, while it sunk to as low as P51.33 against the greenback.
Dollars traded yesterday totalled $614.9 million, down from Wednesday’s $721.85 million.
Traders attributed the sideways movement of the local unit to rising concerns on whether the US will be able to enact its planned corporate tax cuts anytime soon.
“The market is still skeptical over the ability of the US government to pass the tax cut, that is why we saw a weak dollar overnight,” a trader said.
The trader added that the strong peso is no different from the other Asian currencies.
A US Senate tax-cut bill, differing from one in the House of Representatives, was expected to be unveiled on Thursday, complicating a Republican tax overhaul push and increasing skepticism on Wall Street about the effort.
Emerging Asian currencies will remain susceptible to the headlines on the US tax bill, said Qi Gao, Asia FX Strategist at Scotiabank in a report. The dollar stands to lose ground if the Senate tax bill delays plans to cut corporate taxes by one year, he said.
Meanwhile, Land Bank of the Philippines (Landbank) market analyst Guian Angelo S. Dumalagan said this week’s trading remained light due to “a scarcity of fresh leads abroad.”
Mr. Dumalagan added that the market remained cautious ahead of the monetary policy meeting of the Bangko Sentral ng Pilipinas (BSP) for most of the day.
After the market’s close, the BSP announced that it is keeping policy settings steady on the back of manageable inflation and firm domestic economic activity.
Traders expect the peso to move between P51.08 and P51.40 against the dollar today. — KANV with Reuters