Peso dips on firmer US jobs data, safe haven buying

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THE Philippine peso slightly weakened against the US dollar on Monday following upbeat US jobs data and safe haven buying sparked by a referendum in Italy on proposed reforms.

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The Philippine currency closed at an eight-year low of P49.69 to $1, down 4 centavos from Friday’s close of P49.65 to $1.

“The peso depreciated today as the Italian referendum results and Prime Minister Renzi’s subsequent resignation fuelled safe haven buying,” said Guian Angelo Dumalagan, economist at Land Bank of the Philippines.

The upbeat US employment report on Friday also helped strengthen the dollar, Dumalagan said.

The US unemployment rate saw its lowest level since August 2007 at 4.6 percent, beating expectations of a 4.9 percent jobless figure.

In a research note, Metrobank Research explained that euro-dollar trading was the biggest mover in the currency markets in the wake of Italy’s referendum results.

The Italian referendum was a vote for constitutional reform, with Prime Minister Matteo Renzi campaigning for a “Yes.” Voters rejected the proposed changes and as a result, Renzi resigned.

“For tomorrow, the exchange rate may move within the 49.60 to 49.80 range. The peso might weaken anew due to bets of strong US non-manufacturing data,” Dumalagan said.

The peso opened at P49.72 to $1, trading between P49.66 and P49.75 in the course of the day.

Trading volume at the Philippine Dealing System on Monday reached P334.4 million from P602.5 million on Friday.

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