Peso driven lower by mixed signals from US Fed officials

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The PESO closed at a new five-year closing low against the dollar at P46.93 to $1 following mixed clues on interest rates from US Federal Reserve officials.

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The Philippine currency lost 15 centavos in Tuesday trade, hitting its weakest closing level since May 25, 2010, when it ended trading at P47.10 to the dollar.

San Francisco Federal Reserve President John Williams has reiterated that he expects the Fed to raise interest rates this year. Similarly Bank of New York President William Dudley said on Monday the Fed remains on track for a likely rate hike this year.

“[Federal Reserve Bank of Chicago President Charles] Evans, on the other hand, believes that the Fed should delay the liftoff to next year, seeking more confidence that inflation is, indeed, beginning to head higher,” Metrobank Research, the research arm of Metropolitan Bank and Trust Co. (Metrobank), said.

The local currency opened on Tuesday at P46.88 to $1 on the Philippine Dealing System (PDS) before trading between P46.86 and P46.96.

Total volume transacted on the PDS rose to $677.3 million from $465.66 million traded Monday.

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