Peso ends at 10-year low on Fed remarks
THE PESO further slumped versus the dollar yesterday to hit its lowest level in a decade, touching the P50 level anew intraday, due to a stronger dollar in general as market players resorted to safehaven buying amid negative sentiment on the murder of Russia’s ambassador to Turkey and amid hawkish comments from US Federal Reserve Chair Janet Yellen.
The peso ended at P49.999 against the greenback on Tuesday, nearly four centavos lower compared to its P49.96 finish on Monday.
Yesterday’s close is a new low for the peso this year and is also the local currency’s weakest level in ten years since it closed at P50.12 a dollar on Nov. 16, 2006. It also closed at the same level last Nov. 20, 2008.
The local unit traded mostly weaker for the day after it opened the session at P49.99 against the greenback while its intraday low was at P50. The peso’s strength for the day was logged at P49.94 a dollar.
Dollars traded on Tuesday totalled $363.8 million, higher than the $310.6 million that exchanged hands the previous session.
“The peso depreciated today due to safe-haven buying following the killing of Russia’s ambassador to Turkey and hawkish comments from Fed Chair Yellen at the University of Baltimore’s commencement,” a trader said in an e-mail on Tuesday.
Footage posted by the New York Times yesterday showed Russian ambassador to Turkey Anderi Karlov being shot several times by a gunman, who was believed to be an off-duty Turkish police officer, during the opening of an art exhibition in Ankara.
After firing at the ambassador, the attacker shouted “Don’t forget Aleppo. Don’t forget Syria.” He was then killed by Turkish special forces.
Meanwhile, Reuters reported that the Fed chair gave an upbeat outlook of the US jobs market but did not mention any monetary policy decisions during her speech at the University of Baltimore.
Meanwhile, traders said that the Bangko Sentral ng Pilipinas (BSP) stepped in during yesterday’s trading when the peso hit the P50 level versus the greenback.
“We saw some resistance with the monetary authorities in the P50 level,” a trader said in a phone interview.
Similarly, another trader also said: “I think the BSP was well offered in the P50 level that’s why the peso did not end at P50 a dollar.”
The BSP sometimes steps in the currency trading to temper any sharp movements in the peso.
Meanwhile, one trader said: “We saw dollar strengthening against emerging market currencies, where we saw the Malaysian ringgit reach its lowest since the 1998 Asian financial crisis, so the peso generally just tracked the movement of the dollar against other regional currencies.”
“But it should also be noted that market players are still in a holiday mode so we’re testing the P50 level,” the trader mentioned.
For today, two traders expect the peso- dollar pair to trade within P49.85 to P50.05, while the other sees the peso’s strong support to be at P49.90, with its resistance at P50.10.