Peso trades range-bound

The peso continued to trade range-bound, slightly strengthening only on an uptick in the domestic equities market and favorable announcement from the Reserve Bank of Australia (RBA). The Philippine unit moved sideways, gaining only a centavo and a half to 41.17:$1 on Tuesday versus the 41.185:$1 close the previous trading day. “The market has no clear direction so it traded range-bound. Fund managers buy in the 10s and sell in the 20s,” a trader said, noting the peso's 41.12 to 41.205 per dollar range Tuesday. A second trader agreed, adding that menial gains at the close were on “RBA minutes which calmed the market and the increase in the local equities mart.” Benchmark Philippine Stock Exchange index ended trades 0.72 percent higher at 7,327.58, near the record 7,392.2 recorded last Wednesday. According to Reuters, the RBA said in the minutes of its last monetary meeting that it saw the need to cut interest rates to a record-low 2.75 percent at its May meeting because the economy was still growing at below potential and inflation was not a threat. The second trader explained that “previous rate cuts by the RBA were not seen, shocking markets including the currency market.” Some $717.1 million changed hands on Tuesday, above Monday's $631.2 million trading volume. Traders expect the peso to move within the 41.10 to 41.30 per dollar band on Wednesday. — BM, GMA News