The peso continued to lose strength against the dollar on Thursday as the Federal Reserve affirmed its confidence in the US economic recovery, suggesting the likelihood of a Fed interest rate hike later this year.
The Philippine currency closed at P45.250 to $1 on Thursday, losing 4 centavos from Wednesday’s finish at P45.21.
Thursday’s close was the lowest for the peso in nearly 16 months, with the peso settling on March 21 last year at P45.29.
“In her congressional testimony, Fed Chair Janet Yellen restated that the US is on course to raise interest rates this year, but the pace of the increases is likely to be gradual,” Metrobank analysts said in their “Views from the Metro” commentary.
Besides Yellen’s statement, better US data helped fuel the dollar’s strength with Empire Manufacturing and Industrial Production coming in stronger at 3.86 and 0.3 percent, respectively from the forecasts of 3.00 and 0.2 percent, they said.
The peso opened at P45.25 to $1 on the Philippine Dealing System (PDS), before trading between P45.24 and P45.28.
Total volume transacted on the PDS dropped to $549.6 million from $629.2 million previously.