Peso weaker on hawkish Fed signals, record infections
The peso weakened Friday after hawkish policy signals from the Federal Reserve, and as Philippine COVID infection numbers continued to rise.
The peso ended trading at P51.11 to the dollar Friday, against its P51.04 Thursday close, according to the Bankers Association of the Philippines.
It was stronger compared to its P51.35 finish a week earlier.
The peso opened Friday at P51.14. The low was P51.15, while the high was P50.98.
Dollar trading volume fell to $760.5 million Friday from $917.25 million Thursday.
A trader said in an email thatthe peso’s weakness was prompted by risk-off sentiment after hawkish signals were made by Lael Brainard, a member of the Fed’s Board of Governors.
Ms. Brainard, who is President Joseph R. Biden’s pick to become the vice chair of the US central bank, said the Fed is ready to quell inflation by raising interest rates, Reuters reported.
“We do have a powerful tool and we are going to use it to bring inflation down over time,” Ms. Brainard told the Senate Banking Committee in her confirmation hearing Thursday.
If confirmed, Ms. Brainard would replace Vice Chair Richard Clarida who was appointed by former President Donald J. Trump.
Earlier this week, US inflation rose 7% year-on-year in December, the highest level since June 1982.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the peso’s weakness was due to caution over rising infections.
New active cases hit a new record of 37,207 Friday to bring the active total to 265,509, according to the Department of Health (DoH). — Luz Wendy T. Noble
