The peso weakened to a nearly 15-month low of P45.15 to $1 on the last trading day of the week as expectations of strong US retail sales boosted demand for dollars.
“The peso faced weakness with dealers loading up on dollars ahead of the release of retail sales data from the US, with expectations for a strong print to drive expectations of a Fed rate hike anew,” said Nicholas Antonio Mapa, associate economist at the Bank of the Philippine Islands (BPI).
The US Commerce Department is set to report the May retail sales in US on Thursday (Friday in Manila).
For his part, Emilio Neri, BPI vice president and lead economist, said the strong jobs data in the US, which was released last week, was still part of the dollar’s strength.
“Many also see interest rates going up in Europe and the United States. There is a strong possibility that the hike in the US may happen in September rather than in October this year,” Neri said.
The local currency opened at P45 to $1 on the Philippine Dealing System (PDS) before trading between P44.97 and P45.15.
The unit closed at P45.15, the weakest level since March 21 last year when the peso traded at P45.16 per dollar.
Thursday trading showed a 24-centavo fall from the P44.91 close on Wednesday.
Total volume transacted on the PDS rose to $683.9 million from $546.608 million traded Wednesday.