THE PESO rebounded against the dollar yesterday on the back of lower-than-expected US economic growth in the last quarter of 2016 and amid negative market sentiment from US President Donald J. Trump’s recent pronouncements on immigrants.
The peso ended at P49.82 versus the greenback on Monday, three centavos stronger than its P49.85 finish last Friday.
The local unit was traded stronger against the dollar for the day after it opened the session at its peak of P49.80, while its worst showing was at P49.84-to-a-dollar.
Dollars traded on Monday dropped to $246.2 million from the $485.6 million that changed hands the previous session.
Traders said in a phone interview yesterday that the peso-dollar pair ended slightly sideways as the market was relatively quiet as some players were still on holiday due to the Chinese New Year.
“In general most markets were very quiet, partly because the market was on holiday due to the Chinese New Year, that’s why we saw total volume only at $200 million,” one trader said.
On a similar note, another trader said: “There was no liquidity [yesterday] because a lot of people were still on a holiday.”
US GDP, TRUMP
However, the second trader noted that the peso strengthened due to a “slightly weaker dollar over the weekend after the announcement of Trump, and due to lower-than-expected US GDP (gross domestic product) on Friday.”
Similarly, another trader said in an e-mail on Monday: “The peso appreciated today due to weaker-than-expected US GDP growth in the fourth quarter of 2016. Tighter immigration policies in the US under the Trump administration also contributed to the peso’s rise.”
US economic growth slowed in the last quarter of 2016 to 1.9% from the 3.5% recorded in the third quarter on the back of a dip in exports of soybeans.
The fourth quarter’s figure brought full-year GDP growth to 1.6% in 2016 — its worst performance since 2011.
Meanwhile, Mr. Trump signed over the weekend an executive memorandum that amended US refugee and immigration policies, which called for a halt to immigrants coming from countries dubbed with “terrorists,” particularly Syria, Iraq, Iran, Libya, Yemen, Somalia, and Sudan, from entering the US for a period of 90 days.
The seven-page document also noted the complete suspension of the entry of Syrian refugees into the US for an indefinite period.
For today, one trader said the peso may fall within P49.70-P49.90 against the dollar, while the other said the local unit may move between P49.80 and P50 versus the greenback.
Another trader said the peso will likely move around the P49.70 level for the whole week ahead of the US Federal Reserve’s two-day policy meeting scheduled to start today.
“The peso might depreciate due to bets of stronger US reports on personal spending, personal income, and personal consumption expenditure inflation,” one trader said. — Janine Marie D. Soliman
http://www.bworldonline.com/content.php?section=Finance&title=Peso-rebounds-as-weak-US-GDP-report,-Trump-affect-greenback&id=139844
