Peso near 6-year low at P47.16:$1

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The peso slid to weakest level in nearly six years on Monday, tracking other regional currencies, as strong US jobs data increased the likelihood of a Fed rate hike before the end of the year.

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The peso lost 15 centavos to end the day at P47.16 to the dollar, its weakest close since November 27, 2009 when it dived to P47.20:$1.

Nicholas Mapa, associate economist at the Bank of the Philippine Islands (BPI), noted that the dollar gained strength following last Friday’s release of US non-farm payrolls data that showed more jobs had been added than expected.

This, he said, had pushed the “ chance of a Fed rate hike in December to 68 percent … [this]was at 50 percent prior to the non-farm payroll [data release].”

The rest of the week will see a “strong US dollar theme … with expectations for a Fed lift-off in December hogging the limelight,” Mapa said.

“Up next, we’ll have third quarter gross domestic product from major eurozone … On the local front, the BSP [Bangko Sentral ng Pilipinas] meets on Thursday with [Governor Amando] Tetangco [Jr.] seen to keep rates unchanged but watch for any rhetoric on the IRC (interest rate corridor) and the shape of the curve,” he added.

The peso opened at P47.10 to $1 at the Philippine Dealing System (PDS) before trading as low as P47.21. Total volume transacted rose to P720.4 million from P590.80 million last Friday.

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