THE PESO weakened further against the greenback on Wednesday as the government reported a wider budget deficit in January and with investors waiting for fresh signals from the US Federal Reserve’s policy meeting.

The local unit closed at P48.725 per dollar yesterday, down by nine centavos from its P48.635 finish on Tuesday, based on data from the Bankers Association of the Philippines.

The peso started the session at P48.65 per dollar. Its weakest point was at P48.74 while its intraday best was at P48.577 against the greenback.

Dollars exchanged increased to $793.7 million yesterday from $721.9 million on Tuesday.

The peso weakened following the release of fiscal balance data for January, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

Data from the Bureau of the Treasury released on Wednesday showed the budget deficit hit P14.1 billion in January, a reversal of the P23-billion surplus seen a year earlier, as tax collections continued to drop due to the economic downturn.

Meanwhile, a trader said the peso depreciated due to market uncertainty ahead of the policy decision of the US Federal Reserve following its March 16-17 review.

For today, Mr. Ricafort gave a forecast range of P48.65 to P48.75 per dollar while the trader expects the local unit to move within the P48.65 to P48.85 band. — LWTN

RELATED ARTICLESMORE FROM AUTHOR