Peso slumps to P50:$1 level anew on stable US unemployment data

THE PESO plunged against the dollar on Monday, returning the P50 level, due to strong US unemployment data released last week.

The local currency closed the session at P50.15 against the greenback yesterday, 28.5 centavos weaker than the P49.865 close on Friday.

Monday’s finish was also the peso’s worst close in two weeks or since it ended at P50.24-to-thedollar last Dec. 21.

The peso opened the session slightly stronger at P49.86 against the dollar, while its intraday high was seen at P49.81. However, the peso weakened in afternoon trading to close at its worst showing for the day.

Dollars traded climbed to $ 797.1 million from the $ 715.7 million that changed hands the previous session.

“[ Yesterday], the dollar continued to firm up. The peso broke above the P50 figure in the afternoon, and it feels like some of the market players were triggered on that level, so the dollar rallied sharply near the close,” a trader said by phone.

Another trader said the dollar’s strength can be attributed to the “stable US unemployment data released last week despite the weakness of the US non-farm payrolls data.”

Unemployment in the US remained unchanged at the 17- year low of 4.1%. However, the country only generated 148,000 jobs in December, well below the non-farm payroll expectations of 190,000 and the revised November data of 252,000.

The fewer generated jobs in December was mainly due to the retail sector, which lost 20,000 jobs in the said period.

A third trader, meanwhile, said there were “a lot of offshore institutions buying the dollar” against the peso during the afternoon session, causing the local currency to return to the P50 level.

“This is likely due to the dollar strengthening against the regional currencies, especially against the Korean won.”

The trader added that the Bangko Sentral ng Pilipinas likely intervened before the closing to offset the weakness of the local currency.

“It could have been higher but there were aggressive offers from agent banks near P50.15, so that’s where we closed,” one trader noted.

For today, two traders expect the peso to move between P50 and P50.30, another gave a slimmer range of P50.05 to P50.25.

“The peso is expected to further weaken [ today] amid bets of stronger inflation figures from the US after the effectivity of latest corporate tax cuts this year,” the first trader said. •