The Philippine peso weakened anew against the greenback on Monday, closing at its lowest in nearly 11 years as investor sentiment on US Federal Reserve normalization move continued to support the dollar.
The local currency lost 5 centavos in Monday trade and closed at P50.70:$1 from P50.65:$1 on Friday last week.
It was the peso’s weakest finish since settling at P50.73:$1 on September 1, 2006. The peso opened at P50.55:$1 before trading between P50.55 and P50.70.
“The peso initially appreciated today after weak US inflation data supported views of a gradual pace of US interest rate normalization,” said Land Bank of the Philippines market economist Guian Angelo Dumalagan.
US inflation data came in softer than expected in June at 0.0 percent against a 0.1 percent estimate.
However, the peso shed its initial gain toward the end of the day likely due to persistent expectations of another US rate hike this year, Dumalagan said,
For today’s (Tuesday’s) trade, the exchange rate may move within the 50.60 to 50.80 range amid a lack of fresh domestic and foreign leads, he added.
“There might also be caution in the market ahead of the ECB [European Central Bank] monetary policy meeting” this week, he said.
The peso first touched the P50:$1 level on November 24 last year as bets on interest rate hikes in the US, which actually happened in December, favored the dollar. It depreciated by 5.35 percent against the US dollar in 2016.