Peso weakens vs dollar on rising infections
THE Philippine peso on Tuesday weakened further against the dollar as cautious investors waited for signals from the US Federal Reserve and as local coronavirus infections continued to rise.
The local currency closed at P51.30 a dollar, weakening by 30 centavos from Monday’s close, based on data from the Bankers Association of the Philippines.
The peso opened at P51.10 — its intraday best — before closing at P51.30, also its worst showing for the day. Dollars exchanged increased to $1.223 billion from $588.7 million on Monday.
The peso weakened as market participants were expecting hawkish statements from the minutes of the latest policy review of the US Fed to be released on Wednesday, a trader said in an e-mail.
The Fed in its policy review from Dec. 14 to 15 said it would quicken its tapering of asset purchases amid the improving US economy. US central bank officials also said they expect up to three rate increases this year.
Investor worries on rising coronavirus infections had caused the peso to depreciate, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
Active cases rose by 5,434 to 29,809 on Tuesday, according to the Health department. The positivity rate rose to 26.5%.
The peso is likely to trade from P51.15 to P51.35 a dollar on Wednesday, Mr. Ricafort said. — Luz Wendy T. Noble
