Peso weakens anew versus dollar
THE PESO weakened on Thursday in tandem with Asian currencies as the dollar strengthened following the release of the US Federal Reserve meeting minutes.
The local unit ended Thursday’s session at P53.965 versus the greenback, weaker than its P53.89per-dollar finish the previous day.
The peso traded weaker the whole day, opening the session at P53.98 versus the dollar. It slipped to as low as P54.045, while its intraday high stood at P53.94 against the greenback.
Dollars traded slid to $729.25 million from the $872.95 million that switched hands on Wednesday.
A foreign exchange trader said the peso weakened versus the greenback as it consolidated throughout the day.
“We saw the peso trading weaker today, just in tandem with the region. With the yields in the US moving higher also, I think the dollar was bid up,” the trader said in a phone interview on Thursday.
In the minutes of the Sept. 2526 meeting of the policy-setting Federal Open Market Committee (FOMC), central bankers backed raising benchmark rates amid US President Donald J. Trump’s view that the tightening moves have gone too far, Reuters reported.
The hawkish stance of the US central bank also pushed the dollar index higher to 95.65 against a basket of six major currencies.
“The peso depreciated following the release of hawkish FOMC minutes, which showed continued support for gradual US rate hikes,” another trader said.
The first trader added that the peso consolidated yesterday as the market is still awaiting whether the local unit will continue to strengthen or if there will be demand from oil companies as well as importers, which will likely take the opportunity to buy greenback.
“There is still a chance for the peso to improve since the market is expecting the inflation to peak already despite the fact that the Bangko Sentral ng Pilipinas is saying it might be [faster] for October.”
For Friday, the first trader expects the peso to move between P53.80 and P54.05 versus the dollar, although noting that the range will depend on the market’s performance overnight.
The other trader gave a P53.85P54.05 forecast range, saying the peso could weaken further “in view of stronger greenback due to the upbeat US unemployment expectations.”