THE PESO recovered against the dollar on Thursday as market players positioned ahead of US gross domestic product (GDP) growth data released last night.
The local unit closed Thursday’s session at P52.19 versus the greenback, 16 centavos stronger than the P52.35-per-dollar finish on Wednesday.
The peso opened the session flat at P52.35 against the greenback. It dipped to as low as P52.37 intraday before climbing to its best showing of P52.155 per dollar.
Trading volume increased a tad to $892.15 million from the $873.2 million that switched hands the previous day.
A trader said the peso strengthened against the US currency yesterday as market participants onshore and offshore sold their dollars.
“We saw heavy dollar selling throughout the day. We saw a lot of banks having the long position for the past few days. Maybe they were just spreading out given there will be US GDP data tonight,” the trader said in a phone interview.
The trader added that the market expects a three percent US GDP growth in the first quarter. If realized, this will be faster than the 2.2% print posted in the fourth quarter.
“The data will most likely predict how will the dollar move, so most players would want to be square or just trim their position to a minimal level,” the trader said.
“They sold their dollars because of the uncertainty of what will come out in the GDP. Three percent is the expectation. Any figure above that will drive the dollar higher, but any figure below that will drive the dollar lower.”
Meanwhile, another trader said the peso strengthened as market participants opted to pocket profits following the continuous depreciation of the local unit earlier this week due to uncertainties brought by trade tensions between China and the United States.
For today, the first trader expects the peso to trade between P52.10 and P52.40, while the other gave a P52.10-P52.30 range.
Meanwhile, most other Asian currencies weakened on Tuesday after US President Donald Trump reinforced Washington’s hard stance in its trade dispute with China, dampening market sentiment.
In the absence of any key drivers from US markets, which were shut on Monday for a holiday, emerging Asian currencies fell back on the underlying theme of Sino-US trade tension that have roiled global financial markets for months. — K.A.N. Vidal with Reuters