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THE PESO strengthened against the dollar on Monday amid quiet trading as risk appetite increased following strong US economic data released last week.
The local unit closed Monday’s session at P52.11 versus the greenback, up seven centavos from the P52.18 finish last week.
The peso traded stronger the whole day. It opened the session at P52.09 per dollar and surged to as high as P52.06 during the trading session. Meanwhile, its intraday low stood at P52.16 against the US currency.
Trading volume picked up to $957.02 million from $787.81 million that switched hands the previous session.
A foreign exchange trader said the peso traded within range yesterday amid quiet trading, as market participants await a slew of economic data, including domestic gross domestic product (GDP) growth and inflation, as well as monetary policy decisions from both the US Federal Reserve and Bangko Sentral ng Pilipinas.
“We’ve only started the week, so the trading was fairly quiet,” the trader said in a phone interview. “Also, it’s a holiday in Japan for the rest of the week, so Asia time would be fairly quiet for the entire week.”
The trader added that the peso was stronger on the back of positive data in the US such as the GDP report.
The US Commerce Department reported Friday that the world’s largest economy grew 3.2% in the first three months of the year, faster than the 2.2% GDP expansion a quarter ago.
The trader added that better-than-expected GDP data in the US drove risk appetite in the market.
Meanwhile, another trader said the local currency appreciated yesterday amid profit taking on expectations of weak US personal consumption expenditure data for February, the preferred price gauge of the Fed.
“This might increase dovish expectations ahead of the US central bank’s policy meeting this week,” the second trader said in an e-mail.
For today, the first trader expects the peso to move between P52 and P52.25, while the other gave a P52-P52.20 range.
The South Korean won and Thai baht strengthened on Monday as firmer-than-expected US economic growth figures supported risk sentiment, though market holidays and the US Federal Reserve meeting this week are keeping investors cautious.
“The strong US GDP data failed to push the dollar higher but that is real positive news for riskier assets generally and for equities. The Asian markets are in a holding pattern, awaiting key data,” said Khoon Goh, head of Asia research at ANZ. — K.A.N. Vidal with Reuters