THE PESO continued to slump against the greenback on Thursday, hitting a three-week low, amid investor appetite for the dollar and stronger bets of further monetary tightening by the US Federal Reserve ahead of inflation data.
The peso closed at P50.795 per dollar yesterday, dropping 22 centavos from Wednesday’s close of P50.575 versus the dollar.
Yesterday’s finish was the peso’s weakest close in three weeks or since it ended at P50.88-to-the-dollar on July 20.
The peso traded weaker versus the dollar the entire day. It opened the session at P50.65, with its intraday peak at just P50.63 against the greenback. The peso’s worst showing for the day was seen at P50.80-to-the-dollar.
Dollars traded on Thursday amounted to $692.55 million, climbing from the $631.5 million that exchanged hands in the previous session.
One trader attributed the peso’s drop versus the dollar to higher probability of the Fed hiking interest rates by yearend prior to the release of US inflation
“The peso further depreciated today still because of improved chances of a rate hike this year and caution ahead of the US inflation report,” one trader said by e-mail on Thursday.
Another trader said the local currency slid against the dollar on the back of strong demand for the greenback, which was boosted by the tension between the US and North Korea.
“Basically we saw kind of a bid market [yesterday,] after we saw real demand, with oil companies buying the dollar and still from geopolitical tensions in the US that influenced the exchange rate,” the trader said by phone yesterday.
“So that factor was causing a risk-off on markets, meaning, they’re getting out of the peso and they’re all going to the Japanese yen because that currency is a safe haven,” the trader noted.
For Friday, one trader said the exchange rate could settle within P50.60 to P50.80, while the other trader said that the peso could trade within P50.60 to P50.90 against the dollar.
“The dollar might remain strong due to likely upbeat US data on producer prices,” one trader said. — Janine Marie D. Soliman