The Philippine peso fell to its 40-month low against the US dollar Tuesday at 44.80 because of the continued rally of the US currency boosted by the tapering of the Federal Reserve’s stimulus program.
It shed P0.10 from the 44.70 finish on Monday, which a trader said is mainly because of the seemingly unstoppable strengthening of the dollar.
A trader said the peso is expected to touch the 45-level on Wednesday after it breached the 44.75 mark on Tuesday on continued positive developments in the US.
The US Bureau of Labor Statistics is set to release the December 2013 employment data on Friday and the trader said that if the latest figure would be near the 200,000 level, this may be another consideration for further cut in the Fed rate.
During the December 2013 meeting of the Federal Open Market Committee (FOMC), it decided to cut by $10 billion the Fed’s $85-billion monthly bond purchases starting this month given the positive developments in the US economy.
On Tuesday, the peso started trading at 44.68, from the 44.65 the previous day.
It’s highest level for the day stood at 44.66 while weakest was at 44.85 bringing the average at 44.77.
Volume of trade reached $903.6 million, slightly down from the $1.12 billion in the previous trading.
The trader said demand for the dollar has been rising as investors expect a hike in interest rates once the Fed has implemented several cuts in its stimulus program.