• Peso sags further to P46.50/$1

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    The peso weakened to a new five-year low of P46.50 to $1 on the last trading day of the week as a stronger US dollar and the yuan devaluation continued to weigh on market sentiment.

    Philippine financial markets are closed Friday for a national holiday.

    The Philippine currency lost 15 centavos from Wednesday and closed on Thursday at its weakest level since July 7, 2010, when it traded at P46.55 to the dollar.

    “What weakened the peso were the same suspects: lingering effects of the yuan devaluation and the strength of the US dollar,” Jonathan Ravelas, chief market strategist at Banco de Oro (BDO), said.

    Vietnam’s central bank has also devalued the dong currency, affecting market sentiment on Wednesday when it set its reference rate at 21,890 dongs per US dollar and widening the trading band to 3.0 percent on either side of that rate. The dong has weakened by about 3.2 percent this year.

    In Manila, with the peso-dollar closing at P46.50 on Thursday, “near-term risk lies toward the P47.00/P47.50 levels,” Ravelas said.

    The BDO analyst now sees the peso possibly closing at P46.25:$1 by yearend, much weaker than what BDO earlier projected at P45.50.

    The local currency opened on Thursday at P46.28 to $1 on the Philippine Dealing System (PDS) before trading between P46.26 and P46.50.

    Total volume transacted on the PDS rose to $699.7 million from $555.5 million traded Wednesday.

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