THE PESO moved sideways against the dollar on Tuesday on bargain hunting as the local unit approached the P51 level.
The local unit finished trading at P51.09 against the greenback on Tuesday, a centavo weaker from the P51.08-a-dollar close on Monday.
The peso opened the session at P51.08 versus the greenback. Its weakest point for the day was at P51.105, while its intraday best was at P50.98 per dollar.
Dollars traded on Tuesday rose to $1.035 billion from $665.3 million on Monday.
A trader said the peso’s movement on Tuesday was affected by bargain-hunting.
“The peso slightly weakened today with market participants bargain-hunting for the greenback near the P51 level following the recent appreciation of the local currency,” the trader said in an email on Tuesday.
For his part, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the peso’s performance could be attributed to the narrower US trade deficit and the gains in the US stock market as well as the benchmark 10-year US government bonds.
“Peso was slightly weaker after some US stock market index posted new record highs and the narrower US trade deficit data,” Mr. Ricafort said in a text message.
The US goods trade deficit fell in September as trade tensions restricted the flow of goods, but that did not change views that economic growth decelerated further in the third quarter amid slowing consumer spending and declining business investment.
The report from the US Commerce Department on Monday also showed inventories at retailers rising moderately last month, but stocks at wholesalers dropping, leading the Atlanta Federal Reserve to trim its gross domestic product growth estimate for the third quarter by one-tenth of a percentage point to a 1.7% annualized rate.
The economy grew at a 2.0% rate in the second quarter, slowing from the January-March quarter’s 3.1% pace.
For today, the trader expects the peso to range at P50.95-51.15 against the dollar, while Mr. Ricafort predicts the local unit will trade at the P50.90-51.20 band. — L.W.T. Noble with Reuters