Peso weakens versus dollar as markets await Fed signals
THE PHILIPPINE peso weakened against the dollar on Tuesday as the pair consolidated in the absence of major catalysts and as markets continued to await signals from the US central bank on its next policy decision.
It closed at P58.81 a dollar, weakening by 13 centavos from its P58.68 finish on Monday, according to Bankers Association of the Philippines data posted on its website.
The peso opened at P58.65 against the dollar. Its intraday best was at P58.60, while its worst showing was P58.83 against the greenback. Volume jumped to $1.47 billion from $1.05 billion on Monday.
“The dollar-peso traded in a narrow range due to a lack of major catalysts,” a trader said by phone.
The dollar index, which measures the greenback against a basket of currencies, fell 0.5% to 106.2, with the euro up 0.54% to $1.0598.
The index hit a more-than-one-year high last week of 107.07 and has been rising on expectations that a Trump victory could result in higher tariffs and potentially stoke inflation, which would slow the path of rate cuts by the Federal Reserve.
The market also continued to await signals on the Federal Open Market Committee’s policy decision in December, the trader added.
The peso was dragged down by softened market expectations of a rate cut by the Fed in December, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
Markets have pared bets for a quarter-point interest rate cut at the Fed’s next meeting to less than 59%, down from close to 62% a day earlier, according to CME FedWatch.
The trader expects the peso to trade at P58.50 to P58.90 a dollar on Wednesday, while Mr. Ricafort sees it at P58.70 to P58.80. — Aaron Michael C. Sy
