Peso nearly flat vs dollar on election

THE PESO inched up versus the dollar on Wednesday on data showing the country’s trade deficit narrowed in September and amid uncertainties on the results of the presidential election in the United States. The local unit closed at P48.40 versus the dollar on Wednesday, inching up by one centavo from […]

THE PESO inched up versus the dollar on Wednesday on data showing the country’s trade deficit narrowed in September and amid uncertainties on the results of the presidential election in the United States.

The local unit closed at P48.40 versus the dollar on Wednesday, inching up by one centavo from its P48.41 finish on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened Wednesday’s session at P48.40 against the greenback. Its intraday best was at P48.35, while it hit a low of P48.46 per dollar.

Dollars traded rose to $730.86 million on Wednesday from $509.05 million previously.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso inched up after the government posted a slimmer trade deficit in September and amid uncertainties on the presidential election in the United States.

“The reduced trade deficit by about $1.7 billion in September 2020 versus the $3.4 billion a year ago fundamentally translated to less demand for dollars to pay for imports, thereby partly supported the peso’s appreciating trend,” Mr Ricafort said in an e-mail.

A trader, meanwhile, said the peso’s gain was slim as the market remained cautious of the impact of the results of the US presidential election.

“The peso almost closed flat amid uncertainty from the close results of the US presidential race and as tabulation in key swing states have not yet been conclusive,” the trader said in an e-mail.

The US dollar jumped and riskier currencies wilted on Wednesday as early results in the presidential election showed a tight race, surprising currency investors who had been betting on a decisive victory for Democrat Joe Biden, Reuters reported.

US President Donald Trump won in the key battleground states of Florida, Ohio and Texas, dashing market hopes for a clear result. Investors waited to see whether Mr. Trump would retain the Rust Belt states — Michigan, Wisconsin and Pennsylvania — that sent him to the White House in 2016.

The dollar was up 1% as European markets opened, while the offshore-traded yuan, Australian dollar and Norwegian crown, which have for years borne the brunt of Mr. Trump’s protectionist policies, weakened.

At 0718 GMT, the dollar was up around 1% against a basket of currencies, having earlier hit its highest level in more than a month.

For today, Mr. Ricafort expects the peso to range from P48.35 to P48.45 versus the dollar, while the trader sees it moving from P48.30 and 48.50. — with Reuters

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