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THE PESO closed flat against the dollar on Tuesday after treading a wide range as the market stayed on the sidelines ahead of the US central bank’s policy meeting.
The local currency closed yesterday’s session at P52.105 versus the greenback, mostly steady from the P52.11-per-dollar finish on Monday.
The peso traded in a wide range, opening the session a tad stronger at P52.10 per dollar. It climbed to as high as P51.98, while its intraday low stood at P52.185 versus the US currency.
Trading volume surged to $1.404 billion from the $957.02 million that changed hands the previous session.
Traders interviewed yesterday said the peso ended on Tuesday virtually unchanged as the market stayed on the sidelines ahead of the US Federal Reserve’s policy meeting.
“Although it traded on a wide range, the closing rate traded near where we closed on Monday given there’s still data coming up later in the week,” the trader said in a phone interview. So far, the market is on a wait-and-see mode.”
The policy-setting Federal Open Market Committee (FOMC) is set to meet for the third time this week on April 30 and May 1.
“So far, the expectation is still no change in rates, but (the market will look at) the rhetoric on whether they’ll be more dovish at the moment given the negative economic backdrop, especially in Europe,” the trader said.
In the previous Fed meeting last March 19-20, FOMC members unanimously voted not to raise benchmark rates, saying they did not see any possibility for any hikes this year.
“The peso closed slightly lower as market participants generally remained cautious ahead of the US Federal Reserve policy meeting…” another trader said in an e-mail.
The first trader also noted that the peso strengthened to breach the P51-per-dollar level intraday as banks shored up funds to cover for remittances coming in today.
Financial markets are closed on Wednesday for the Labor Day. — K.A.N. Vidal