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Peso rebounds on profit taking

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peso 041719 - Peso rebounds on profit taking

THE PESO recovered a tad against the dollar on Monday as banks pocketed profits amid uncertainties on the trade relations between the United States and China.

The local unit closed Monday’s session at P52.59 versus the greenback, four centavos stronger than last Friday’s finish of P52.63.

The peso opened the session slightly stronger at P52.60 against the dollar. It went to as high as P52.57 intraday, while its worst showing stood at P52.71 per US currency.

Trading volume thinned to $1.084 billion from $1.188 billion that switched hands the previous session.

A foreign exchange trader said in a phone interview that the peso strengthened versus the greenback particularly in the morning session due to heavy dollar selling.

“We saw dollar’s strength overnight, still due to uncertainties on US-China trade talks. However, we saw heavy dollar selling in the morning session as banks were taking profits on their long positions,” the trader said yesterday.

The trader added that the peso reached its intraday low in the afternoon before closing the session near its best showing on the back of more profit-taking as well as conversion of remittances accumulated over the weekend.

US President Donald Trump said his tariffs on Chinese goods are causing companies to move production out of China to Vietnam and other countries in Asia, and added that any agreement with China cannot be a “50-50” deal.

In an interview with Fox News Channel recorded last week and aired on Sunday night, Trump said that the United States and China “had a very strong deal, we had a good deal, and they changed it. And I said that’s OK, we’re going to tariff their products.”

No further trade talks between top Chinese and US trade negotiators have been scheduled since the last round ended on May 10 — the same day Mr. Trump raised the tariff rate on $200 billion worth of Chinese products from 10%. Mr. Trump took the step after China soured the negotiations by seeking major changes to a deal that US officials said had been largely agreed.

“The peso appreciated on the close due to profit-taking despite broad weakness intraday after US President Trump commented of being ‘very happy’ with the current trade war with China,” another trader said in an e-mail.

For today, the first trader expects the peso to move between P52.50 and P52.80 versus the dollar while the other gave a P52.50-P52.70 range. — K.A.N. Vidal with Reuters

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