Peso at 2-week low pending Fed rate move

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The peso closed at its weakest level in two weeks on Monday as global markets took positions in the dollar ahead of the yet uncertain timing of the United States Federal Reserve interest rate hike while China exports lost steam, bolstering the US currency further.

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The Philippine unit ended trade at P44.67 to $1, losing 12 centavos from Friday’s P44.55.
Monday’s close was the poorest for the peso against the dollar since it settled at P44.70 on March 31 this year.

The “peso moved in line with regional currencies as the dollar continued to gain while markets attempted to ascertain the timing of the Fed hike. Foreign players unloading shares also pushed the peso weaker,” Nicholas Antonio Mapa, Bank of the Philippine Islands associate economist, said.

Last week, two influential Fed officials said the Fed could still hike interest rates in June despite disappointing data on US jobs growth, manufacturing activity and retail sales.

“Poor economic data from China also added to the risk off tone,” he added, referring to the 15 percent drop in Chinese exports in March.

The local currency opened at P44.56 to $1 on the Philippine Dealing System (PDS) on Monday before trading between P44.56 and P44.68.

Total volume transacted on the PDS rose to $627.2 million from $587.5 million in previous trading.

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