Peso trades flat as optimism on US fiscal cliff talks ebbs

The peso closed unchanged at 41.07:$1 on Friday as investors await for a concrete solution to the looming “fiscal cliff” in the US. 

 

More than $867.8 million were traded during the session.

 

The Philippine unit “tracked developments in US fiscal cliff talks,” a trader said. 

 

A second trader said the peso depreciated to as much as 41.16:$1 on Friday as demand increased on hopes that a solution to the so-called fiscal cliff will be reached. 

 

Republican House speaker John Boehner has proposed a bill that would place steep tax increases and deep spending cuts.

 

But the optimism was stunted by the bill's rejection by  Republicans in Congress. Lawmakers have to find a solution by Jan. 1, or else the US economy could face a recession. 

 

“The peso then strengthened after investors realized that a concrete solution was not met,” the first trader noted. 

 

The second trader also banks “lobbying remittance inflow ahead of the weekend pushed strengthened the peso before trading ended.”

 

Traders expect the peso to trade within a tight 40.95 to 41.20 per dollar range when trading resumes on Wednesday, Dec. 26. 

 

Philippine markets are closed on Monday and Tuesday in observance of the Christmas holidays.  — VS, GMA News