The peso lost strength against the US dollar in Thursday’s trade as Philippine stocks were dragged by global investor reaction to the US Fed chair’s warning over market valuations and anxiety over Europe.
The local currency closed at P44.71 to $1 on Thursday, shedding 17 centavos from Wednesday’s finish at P44.54.
Thursday’s close was the lowest finish for the peso in more than five weeks since it settled at P44.80 on March 30. Jonathan Ravelas, BDO chief market strategist, blamed the peso’s weakness on the outflow of portfolio funds from the local stock market.
The benchmark Philippine Stock Exchange index lost 57.37 points or 0.73 percent to close at 7,816.27 on Thursday. The market tracked Wall Street’s decline after US Federal Reserve Chair Janet Yellen’s warning of high valuations fueled further anxiety about future interest rates.
“Since the USD/PHP broke the 44.30/60 range, risk lies at the break of 44.85. Could see 45.00 level if weakness persists,” Ravelas added.
The peso opened at P44.55 to $1 on the Philippine Dealing System (PDS), before trading between P44.55 and P44.73.
Total volume transacted on the PDS rose to $781.1 million from $559.3 million previously.