Peso moves sideways to 40.89:$1

GMA News January 7, 2013 5:47pm

The peso moved sideways on Monday as investors maintained a wait-and-see attitude, with slight gains made only due to importers' demand.

The Philippine unit ended Monday slightly stronger at 40.89:$1, gaining only two centavos from Friday's 40.91 close. Some $840 million were traded on Monday from $1.44 billion previously.

"There was very little action on the trading today as investors await more economic data from the US as well as news on the final decision on QE2 [second phase of quantitative easing]," a trader said, referring to the US program of buying $85 billion worth of US debt papers to boost its economy.

On Friday, investors unloaded riskier assets, including peso-denominated investments, on news that quantitative easing will end. This caused the peso to end a four-day rally.

The US Federal Reserve has hinted that it may end its bond buying program by the middle of the year, although a final decision is not yet announced.

In a separate interview, second trader said, "The peso was slightly up today due to corporate demand coming from importers buying dollars to service their requirements."

Noting that investors will continue to track events in the US, traders expect the peso to move within a tight 40.80 to 41.00 per-dollar band on Tuesday. — BM, GMA News