The peso closed at its weakest level against the dollar in nearly two weeks as the market worried about a possible policy rate hike by the Federal Reserve as soon as the present risks to the US economic outlook clear up.
The Philippine currency lost strength to end at P44.61:$1 in Monday’s trade, its lowest finish since it hit P44.72:$1 on May 13.
“The greenback [was]stronger against major currencies following the Fed comments that it was on track to hike its rates as economic headwinds wane,” Jonathan Ravelas, BDO chief market strategist, said.
Ravelas is now looking at the P44.30:$1 to P44.60:$1 range for the local currency.
Last week, Fed chief Janet Yellen said a rate hike was appropriate if the US economy remained on its current path. She pointed out the Fed was on track to raise interest rates this year, but would proceed cautiously.
The local currency opened at P44.60 to $1 on the Philippine Dealing System (PDS) on Monday before trading between P44.59 and P44.64.
The unit lost 7 centavos from the P44.54 close on Friday. Total volume transacted on the PDS fell to $272.3 million from $465.1 million in previous trading.