THE PESO slightly weakened on Thursday on risk-off sentiment due to new cases of the coronavirus disease 2019 (COVID-19) outside China and with signals that the US Federal Reserve might not tweak its rates anytime soon.
The local unit ended trading at P50.58 versus the dollar, depreciating by four centavos from its P50.54 finish on Wednesday.
The peso opened at P50.60 versus the dollar. Its weakest showing for the day was at P50.69, while it rallied to as strong as P50.57 against the greenback.
Dollars traded climbed to $1.235 billion from $998.3 million on Wednesday.
A trader said the slight weakness in the local unit came amid developments in the COVID-19 outbreak.
“The peso got weaker with the COVID-19 seen developing in Japan and South Korea. This resulted to kind of a risk-off sentiment,” the trader said in a phone call.
CNBC reported Japan’s ministry of health confirmed the deaths of two passengers on board the virus-stricken Diamond Princess cruise ship that was under quarantine at Yokohama Port, near Tokyo.
Meanwhile, Reuters reported that Korea’s Center for Disease Control and Prevention (KCDC) reported 31 new cases of the virus on Thursday, which brought the country’s toll of infected cases at 82.
About 49 of said patients are in Daegu or nearby, possibly getting infected through a person who attended a local church.
Meanwhile, another trader attributed the peso’s depreciation to the recent signals of a hold from the Fed.
“The peso depreciated slightly after the Federal Reserve policy minutes indicated that the US policy makers are keen to hold its current policy rates steady, which tempered some market bets of a possible US interest rate cut in the near term,” the second trader said in an e-mail.
Reuters reported that the minutes showed Fed being clear that it looks to hold interest rates steady after three cuts in 2019.
The Fed pointed out to the US consumer spending levels, dissipating US-China trade tensions, and loose financial conditions as a support to their view.
For today, both traders see the peso moving within P50.50-P50.70 against the dollar. — Luz Wendy T. Noble with Reuters