The peso lost further ground against the US dollar on Tuesday, hitting a four-month low as investors took positions in the greenback in anticipation of the outcome of the latest United States Federal Reserve policy meeting, which just started.
The local currency opened at P44.20 to the dollar and touched an intra-day low of P44.36 before closing at P44.23.
Tuesday’s closing level is the weakest since May 7, when the peso traded at P44.22.
It dropped 5 centavos from the P44.18 close on September 15.
Volume transacted on the Philippine Dealing System rose on Tuesday to $1.032 billion from $728.7 million recorded on Monday.
Nicholas Antonio Mapa, Bank of the Philippine Islands associate economist, said continued anxiety over the outcome of the US Federal Open Market Committee meeting on September 16 to 17 took its toll on the local unit.
“The peso was trading sideways in the morning session before turning weaker in the afternoon session as offshore players sold the peso,” he explained.
Mapa added that the peso had been a favorite of offshore players on expectations the currency would appreciate but such hopes waned in recent months as prospects for further economic upside now seem limited.
“Moody’s affirming the Philippine credit outlook may have been interpreted that the much hoped-for upgrade would not be coming any time soon,” he said, referring to a recent report by Moody’s Investors Service.
In the report, Moody’s said it has retained the country’s Baa3 credit rating with a positive outlook amid the bond tapering program initiated by the US Federal Reserve late last year.