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Peso up ahead of US-China talks

peso up ahead of us china talks 816x445 - Peso up ahead of US-China talks

THE PESO gained against the dollar on hopes that the United States and China will resolve their trade dispute in talks scheduled this month.

The local currency ended at P51.83 against the greenback on Monday, appreciating by 4.5 centavos compared to the P51.875-per-dollar close on Friday.

The peso opened the session at P51.88 versus the dollar, which was its weakest point for the day. Meanwhile, its intraday best was at P51.73 against the greenback.

Dollars traded dropped to $991.27 million from $1.209 billion on Friday.

One trader said the peso continued to strengthen as it rode on momentum from the past few days.

“There was heavy selling during the morning session. We could see lower dollar to peso [exchange rate] for the past few days, with the breaking of the key support levels of P51.77 which is the recent low,” the trader said.

Meanwhile, another trader attributed the peso’s performance to developments in the trade war between the US and China.

“The peso strengthened after the Chinese government confirmed its scheduled trade discussions with the United States in Washington next week,” the second trader said.

China hopes Beijing and Washington will resolve their trade dispute “with a calm and rational attitude”, Chinese Vice Commerce Minister Wang Shouwen said on Sunday, ahead of talks in two weeks between the two sides.

The United States and China have been locked in an escalating trade war for over a year. They have levied punitive duties on hundreds of billions of dollars of each other’s goods, roiling financial markets and threatening global growth.

A new round of high-level talks between the world’s two largest economies is expected in Washington on Oct. 10-11, led from the Chinese side by President Xi Jinping’s top economic adviser, Vice Premier Liu He.

Mr. Wang, who has been part of China’s negotiating team with the United States, told a news conference that Liu would go to Washington for the talks the week after China’s National Day holiday, which ends on Oct. 7.

He said he hoped both sides would find ways to resolve their differences. “We believe this will benefit both countries’ people and the world,” he added.

The Trump administration is considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from US stock exchanges.

Sources told Reuters on Friday that the move would be part of a broader effort to limit US investments into Chinese companies, in part because of growing security concerns about their activities.

The yuan was steady ahead of a week-long holiday. Chinese financial markets will be closed for the National Day holiday from Tuesday.

The South Korean won firmed marginally with gains capped by weak August factory data. The country’s industrial output dropped 2.9% from the previous year, compared with a 0.2% decline predicted by a Reuters poll, while its service sector output rose 1.2% from the previous month.

Financial markets in Taiwan were closed for a holiday.

For today, the first trader expects the local unit to move within the P51.75-P52 range against the dollar, while the second trader sees it playing around the P51.80-P52 band. — LWTN with Reuters

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