Politics

Peso rebounds on wider trade deficit in Dec.

1 Mins read

THE PESO appreciated against the greenback on Wednesday on the back of data showing a wider December trade deficit.

The local unit finished trading at P48.075 per dollar yesterday, gaining 0.5 centavo from its P48.08 close on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened the session at P48.06 versus the dollar. Its weakest level was at P48.095 while its intraday best was at P48.055 against the greenback.

Dollars traded increased to $1.123 billion on Wednesday from the $1.014 billion seen on Tuesday.

The peso was supported by the wider trade deficit in December, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

The country’s trade deficit stood at $2.18 billion in December, wider than the $1.73 billion logged in November but narrower than the $2.96-billion gap a year ago.

Meanwhile, a trader said hopes of continued dovish guidance from the US Federal Reserve also provided support to the peso.

Investors are waiting for comments from Fed Chairman Jerome J. Powell as they conclude a two-day policy meeting on Wednesday, with expectations leaning towards continued accommodative monetary policy.

“The local currency might weaken from the release of likely weaker fourth-quarter GDP (gross domestic product) reports,” the trader said.

For Thursday, Mr. Ricafort gave a forecast range of P48.05 to P48.10 per dollar while the trader expects the peso to move within the P48 to P48.10 level. — LWTN

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