The Philippine peso slumped to the P50:$1 mark at the opening session on Thursday as the market refocused on the US after Federal Reserve Chair Janet Yellen expressed a positive view of the US economy.
The peso regained some pace to finish trade on the Philippine Dealing System at P49.98. Still, it was the weakest finish for the local currency since Dec. 22, 2016, when it closed at P49.995:$1.
The first time the currency hit the P50:$1 mark was on Nov. 24, 2008.
“Fed Chair Yellen’s positive view of the US economy, which is near or at the Fed’s goal, while inflation in December was at 2.1 percent – this resulted in higher US yields,” ING Bank Manila senior economist Joey Cuyegkeng said.
Yellen said on Wednesday (Thursday in Manila) at the Commonwealth Club in San Francisco, “Now it’s fair to say the economy is near maximum employment and inflation is moving toward our goal.”
She added, “Although inflation has been running below our 2 percent objective for quite some time, we have seen it start inching back toward 2 percent last year as the job market continued to improve and as the effects of a big drop in oil prices faded.”
Besides this, the peso was also weighed down by caution ahead of US President-elect Donald Trump’s inaugural on Friday (Saturday in Manila), Cuyegkeng said.