Peso falls to new 8-yr low on Fed rate hike worries

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The peso weakened to a fresh eight-year low against the greenback on Thursday as expectations of a Fed rate hike in December continued to nag at investor sentiment.

The Philippine currency slipped by 0.24 percent or 21 centavos to P49.56 to $1, its weakest since trading at P49.83:$1 on Nov. 24, 2008.

The peso opened at P49.36 to $1 on Thursday from P49.35 on Wednesday, before trading between P49.56 and P49.22 against the dollar.

“Fed’s Bullard, a voter, said it is highly unlikely for a December rate hike from not happening. Market is now pricing 94 percent chance of hike,” according to Metrobank Research. He was referring to the Federal Reserve Bank of St. Louis President James Bullard.


“[Philadelphia Federal Reserve President Patrick] Harker also spoke, saying that fundamentals have not changed since November 8 despite elections,” Metrobank wrote in a market note.

The transaction volume reached P821 million at the Philippine Dealing System compared with P666 million on Wednesday.

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