THE PESO may climb further on corporate flows and amid continued optimism regarding the trade talks between the United States and China.
The local currency closed at P51.58 against the greenback on Friday, gaining six centavos from its P51.64-to-a-dollar finish on Thursday.
Week on week, it strengthened by 15 centavos from the P51.73 close last Oct.4.
“The peso’s strength was on the back of positive developments coming from the US and China trade talks which commenced on Thursday. Corporate demand resurfaced which brought down the peso to a strong close,” a trader said in a phone call.
Aside from optimism due to the US-China trade talks, Rizal Commercial Banking Corp. (RCBC) chief economist Michael L. Ricafort attributed the peso’s performance to better global risk appetite.
US President Donald Trump on Friday outlined the first phase of a deal to end a trade war with China and suspended a threatened tariff hike, but officials on both sides said much more work needed to be done before an accord could be agreed.
This week likely be muted with holidays in the US and Japan coming up, according to the trader. “What will be the main driver will be corporate flows.”
RCBC’s Mr. Ricafort, on the other hand, expects that markets will continue to look for positive developments in the US-China trade talks ahead of the scheduled increase in US tariffs on Oct. 15.
For this week, the trader expects the peso to play around the P51.40-51.80 level, while Mr. Ricafort sees it trading within P51.30-51.80. — LWTN with Reuters