Peso weakens anew, ends at 50.31 : $1

The peso retreated anew yesterday, shedding three centavos to close at a fresh 10-year low against the dollar due to the rising possibility of another interest rate hike in the US.

At yesterday’s trading at the Philippine Dealing System (PDS), the peso closed at 50.31 from Wednesday’s close of 50.28 to $1. This was the lowest level since it closed at 50.32 to $1 on Sept. 26, 2006.

The local currency opened weaker at 50.30 and eventually strengthened to an intraday high of 50.27 to $1.

Volume amounted to $409 million, lower than the $429.8 million recorded last Wednesday.

angko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said investors are likely to focus on the outcome of the rate-setting meeting of the US Federal Reserve this month as the speech delivered by US President Donald Trump the other day lacked in details.

“The market may turn its focus again on the Fed and expectations of its next moves. The peso and other emerging market economies currencies would likely trade in a relatively narrow band until more clarity comes from US policy makers,” Tetangco said.

The US Federal Open Market Committee (FOMC) is set to meet on March 14 and 15.

“The Trump speech as I understand didn’t provide much in terms of details. The market will therefore still try to get a feel of how the stimulus will be funded and whether such moves will raise the US inflation path

appreciably,” Tetangco said.

Land Bank of the Philippines market economist Guian Angelo Dumalagan said the peso would move within the 50.20 to 50.40 to $1 range.

“The peso might move sideways due to US President Trump’s safe speech and bets of balanced US economic data,” Dumalagan said.

ING Bank Manila chief economist Joey Cuyegkeng said the peso would remain rangebound, trading between 50.10 and 50.40 as market awaits additional cues from US Fed chair Janet Yellen.

He said the chances of another rate hike by the US Fed this month have increased to more than 50 percent from 40 percent last week.