Peso gains on profit taking, possible intervention

THE PESO rebounded against the dollar on Wednesday despite touching new lows early in the session, supported by profit taking and likely intervention from the central bank.

The currency rose by 10 centavos to close at P61.38 a dollar from P61.48 on Tuesday, according to Bankers Association of the Philippines data posted on its website.

The local unit opened the session flat at P61.48 per dollar and logged an intraday high of P61.35 against the greenback.

Meanwhile, the day’s trough was at P61.68, which was weaker than its all-time-low close of P61.567 logged on April 29.

Dollars traded rose to $1.8 billion from $1.51 billion in the previous session.

“The peso appreciated on profit taking as the local currency hit around the high P61 level,” a trader said in a Viber message.

The peso was mainly supported by possible intervention or volatility smoothening activities by the central bank after it sank to fresh lows in the morning session, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The Bangko Sentral ng Pilipinas has said that it maintains a presence in the foreign exchange market to prevent sharp swings but does not have a target level for the currency.

For Thursday, the trader said the peso could weaken anew as markets expect an uptick in US producer inflation data to be released overnight.

Both the trader and Mr. Ricafort see the peso moving between P61.25 and P61.50 a dollar on Thursday. — Aaron Michael C. Sy