THE PESO sank back to the P50-per-dollar level on Thursday after the US Federal Reserve said economic recovery will likely come at a slower pace and as investors await announcements on new lockdown measures here at home.

The local unit finished trading at P50.195 per dollar, depreciating by 34.5 centavos from its P49.85 close on Wednesday, according to data from the Bankers Association of the Philippines.

The peso opened the session at P49.93 against the dollar. Its intraday weakest was at P50.20 while its strongest was at P49.80 versus the greenback.

Dollars traded fell to $974.24 million on Thursday from the $1.12 billion seen on Wednesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said risk-off sentiment on the peso came after the release of the US Federal Reserve’s economic outlook.

“The peso exchange rate closed weaker after latest signals from the US central bank that the US economic recovery may take realistically much longer,” Mr. Ricafort said in a text message.

Reuters reported that Fed Chairman Jerome H. Powell said it may take years to restore the 20 million in job losses so far since February.

“It is a long road. It is going to take some time,” Mr. Powell said. “We can use our tools to support the labor market and the economy and we can use them until we fully recover.”

He added that they are “not even thinking about raising rates” at this point.

Meanwhile, a trader attributed the peso’s decline to safe-haven demand for the dollar before the holiday.

“The peso weakened from dollar safe-haven demand ahead of the long weekend as the formal announcement of local quarantine policies were deferred to Monday,” the trader said in an e-mail.

Presidential Spokesperson Harry L. Roque said on Thursday that President Rodrigo R. Duterte will update the nation on the degree of community quarantine measures that will be imposed after June 15. — LWTN with Reuters

RELATED ARTICLESMORE FROM AUTHOR