December 12, 2017 | MANILA, PHILIPPINES

Peso recovers ahead of French presidential election

THE PESO rebounded against the dollar on Friday ahead of the French presidential election on April 23.

The peso closed at P49.76 versus the greenback on Friday, gaining seven centavos from Thursday’s finish of P49.83.

The local currency opened Friday’s session at P49.82 per dollar, with its intraday high logged at P49.73. Its lowest showing for the day was P49.85 against the greenback.

Dollars traded, however, slid to $384.6 million from the $582.3 million that changed hands on the previous close.

“Initially the market tried to trade higher. We opened at P49.82 then tested P49.85. So we saw a lot of profit taking. A lot of banks unwound their long positions, which caused a breach of the low yesterday of P49.77. But as soon as that support broke, we saw the buyers come in,” a trader said in a phone interview.

“Most likely the market also lightened their long position ahead of the French elections over the weekend. It’s pretty hard to call -- most likely it’s going to be Emmanuel Macron and Marine Le Pen on the round two of elections,” the trader added.

Should no candidate win a majority on the April 23 vote, a run-off election between the top two candidates will be held on May 7.

“The peso strengthened today due to profit taking after the dollar’s recent surge. Trading activity was light, as some investors were cautious ahead of the French presidential election,” another trader said on Friday.

“If [Ms.] Le Pen wins, [Mr.] Macron is the pro-EU (European Union) and pro-common currency. So if he doesn’t enter the election, it might strengthen the dollar, and conversely when Le Pen wins. So hopefully Macron gets the lead in the first election,” the trader said. -- E.J.C. Tubayan