• Peso hits 15-week low at P50.37:$1, closes at P50.34

    The Philippine peso slipped further against the US dollar in Thursday trade, hitting its lowest value in 15 weeks at P50.37 as the local market took a cautious stance against mixed signals from the US Federal Reserve on interest rates and the slump in oil prices.
    The peso lost P0.07 in opening trade at P50.22, slipping further to P50.37 before closing at P50.34,
    reducing its loss for the day to P0.05. The day’s low of P50.37 was the weakest for the peso since March 9 this year, when it reached P50.39:$1.
    The dollar also extended gains against the yen on fresh indications the Federal Reserve will lift interest rates again this year.
    “Fed speak was mixed. Boston Fed President Eric Rosengren said low rates pose financial stability risks but Dallas Fed President Robert Kaplan, a voter in the FOMC [Federal Open Market Committee] this year, sounded concern over weak inflation but considers it to be likely transitory,” Metrobank Research said.

    Earlier, New York Fed President Willian Dudley said he expected that a tight labor market would eventually trigger a rebound in the unexpectedly weak inflation data, but that he was confident the US expansion had further to go, while cautioning of risks in not raising interest rates.

    The Fed recently raised its benchmark interest rates, citing a better labor market and moderately improving economic activity. The US central bank also continued to project a third rate increase this year, essentially brushing aside weaker inflation and consumption data in recent weeks.
    Metrobank also noted that the oil price, which had dropped to seven-month lows, set a risk-off tone, with the WTI falling below $43 per barrel amid concerns the Organization of Petroleum-Exporting Countries-led output cuts would not succeed in rebalancing the market.
    The peso first touched the P50:$1 level, a 10-year low, 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 dollar last year.  MAYVELIN U. CARABALLO

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