THE PESO weakened by a tad to a fresh 12-year low on Wednesday as the market awaits the policy decisions of the local and US central banks.
The local unit ended Wednesday’s session at P54.325 versus the greenback, a shade weaker than the P54.31-per-dollar finish the previous day.
This was the peso’s weakest in nearly 13 years since it closed at P54.425 versus the greenback on Nov. 22, 2005.
The peso opened the session stronger at P54.29, climbing to as high as P54.22. However, its intraday low stood at the closing rate of P54.325 against the US currency.
Dollars traded declined to $623.4 million from the $668.35 million that switched hands on Tuesday.
A foreign exchange trader said the peso consolidated during Wednesday’s trading even as the bias was on the high.
“It traded to as [high] as P54.22 as we saw the dollar in general traded a bit lower versus the major currencies,” the trader said in a phone interview. “However, it traded weaker towards the close.”
The trader added that the movement was contained as the Bangko Sentral ng Pilipinas (BSP) traded at the P54.35 level.
“For Thursday, let’s see what the will BSP do. We also have to see their rhetoric if it’s still going to be hawkish,” the trader added.
The central bank is widely expect to raise its benchmark rates by another 50 basis points (bp) to rein in inflation, which quickened to its fastest pace in nearly a decade at 6.4% in August.
Meanwhile, another trader said the peso closed again to a record low ahead of the Federal Reserve meeting, where it’s expected to raise key rates by 25 bps.
For Thursday, the first trader expect the peso to move between P54.20 and P54.35, while the other gave a P54.10-P54.30 range.
“The local currency might gain strength as market players will likely to take profits from the hawkish Fed rate decision and in anticipation to [hawkish] monetary policy decision from the BSP at the close of the trading day,” the second trader noted. — Karl Angelo N. Vidal