Home Banking & Finance Peso slips ahead of Fed review

Peso slips ahead of Fed review

THE PESO inched lower versus the dollar due to losses at the stock market and ahead of the US central bank’s policy meeting. — BW FILE PHOTO

THE PESO closed nearly flat versus the greenback on Monday as local stocks declined and ahead of the US Federal Reserve’s two-day policy meeting this week.

The local unit finished at P50.35 per dollar on Monday, barely changed from its P50.34 close on Friday, based on data from the Bankers Association of the Philippines.

The peso opened Monday’s session at P50.33 against the dollar. Its weakest showing was at P50.40, while its intraday best was at P50.265 versus the greenback.

Dollars exchanged increased to $944.37 million on Monday from $804.6 million on Friday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the peso’s performance to losses at the stock market.

The benchmark Philippine Stock Exchange index shed 148.13 points or 2.27% to close at 6,372.61 on Monday, while the broader all shares index lost 73.36 points or 1.81% to end at 3,965.15.

Meanwhile, a trader said the peso moved sideways as investors are waiting for signals from the Federal Open Market Committee’s (FOMC) meeting this week and amid lingering concerns over the Delta variant of the coronavirus disease 2019 (COVID-19).

The FOMC will hold its policy review from July 27-28. The Fed last month kept borrowing costs near zero to support economic recovery, but said rate hikes may come as soon as 2022 or 2023, earlier than what was previously signaled.

Meanwhile, the Health department on Sunday reported 55 new cases of the Delta variant of COVID-19 in the country, bringing the total to 119 infections so far. Of these, four have died, while 103 are tagged as recovered. Active cases of the variant stood at 12.

Overall, there were 5,479 new COVID-19 infections reported that day, which brought the country’s active cases of the virus to 54,262.

The government on Friday placed Metro Manila and the provinces of Ilocos Norte, Ilocos Sur, Davao de Oro and Davao del Norte under general community quarantine “with heightened restrictions” until the end of the month to stem the spread of the virus.

For Tuesday, Mr. Ricafort expects the local unit to move within P50.20 to P50.40 versus the dollar, while the trader gave a forecast range of P50.25 to P50.45. — LWTN