The local unit closed at P49.92 versus the greenback on Monday, six centavos weaker from last Friday’s P49.86-per-dollar finish.
The peso opened at P49.89 against the foreign currency, which was also its peak for the day. Its intraday trough was at P49.95-a-dollar.
Dollars traded on Monday contracted to $347.5 million from the $422.1 million that changed hands during Friday’s session.
“The peso depreciated [yesterday] due to bets of more fiscal stimulus under the Trump administration and as a reaction to the peaceful meeting between US President [Donald J.] Trump and Japanese Prime Minister Shinzo Abe,” a trader said in an e-mail.
Markets are now waiting for Mr. Trump to announce his “phenomenal” tax reform plan for the US economy, with the US President yet to provide any solid details regarding his plans to trim taxes since he was elected last Nov. 9, 2016.
Reuters reported that the meeting between the US President and Japanese Prime Minister bared nothing on currency policies or anything about bilateral trade deals and issues.
With this, another trader said in a phone interview: “It’s very rare that state visits become a market mover since it’s nothing out of the ordinary. I feel like it’s a non-event.”
The trader added that the peso’s closing rate was still within a tight range due to a “very quiet market since there were no leads and other markets were quiet as well.”
For today, traders said the peso-dollar exchange rate could move within P49.50 to P50.00.
“The peso might move sideways due to scarcity of fresh leads domestically and abroad,” one trader noted.
Asked what global or domestic developments could move the exchange rate this week, the other trader said that US Federal Reserve Janet L. Yellen’s speech may be one lead, but could also be a non-event.
Ms. Yellen is due to speak about the US economy and monetary policy before the Senate Banking Committee on Feb. 14, and give further testimony before the House Financial Services Committee on Feb. 15.
However, the trader said the Fed’s next interest rate move could be determined “depending on Yellen’s tone in her speech.”
Markets are anticipating that the US regulator could tighten policy rates anew during their March 13-14 meeting, shortly after it decided to raise borrowing costs by a quarter of a percentage to within 0.50-0.75% last December.
“But I doubt that they will hike rates next month but we’ll see, it really depends on Yellen’s tone.”
Most emerging Asian currencies inched lower on Monday, as the dollar held firm after a closely watched two-day US-Japan summit over the weekend did not unnerve markets by mentioning currency policy.
That outcome led to a rise in the dollar against the Japanese yen and helped support the greenback against a basket of six major currencies, with the dollar index edging up around 0.2%.
Most emerging Asian currencies inched lower against the greenback. Currencies such as the Singapore dollar and South Korean won slipped 0.1%.
The moves in emerging Asian currencies were mild, however, as market participants await Ms. Yellen’s testimony to Congress later this week, as well as details on Mr. Trump’s tax reform plans, expected in the next few weeks.
Still, given lingering uncertainty over the details of Mr. Trump’s tax plan, and whether it would be supported by Congress, any gains in the dollar could be limited in the near term.
by Land Asia Listings
