Peso plunges to one-month low
THE PESO plunged against the dollar on Wednesday as wider trade deficit and slow remittance growth dragged the currency down.
The local currency ended yesterday’s session at P50.705 against the greenback, 21.5 centavos down from its P50.49-per-dollar finish on Tuesday.
This is the peso’s weakest closing in over a month or since Dec. 6, when it closed at P50.71 per dollar.
The peso traded weaker the whole day, opening the session at P50.50 versus the dollar, which was also its best showing during yesterday’s session.
Yesterday’s intraday low was at P50.78 against the greenback.
Dollars traded spiked to $930.65 million yesterday, up from the $875.37 million that changed hands in the previous session.
“The peso was very weak [yesterday]. A lot of factors, actually. We saw disappointing figures from the OFW (overseas Filipino worker) remittances,” a trader said by phone.
Money sent home by overseas Filipinos stood at $2.262 billion in November 2017, higher than the $2.217 billion posted in a comparable year-ago period. However, the growth in remittances slowed to 2% from the 18.5% growth the same period in 2016.
“We saw disappointing figures… I think it was a reaction to the trade balance that we saw last week,” the trader added.
Data from the Philippine Statistics Authority released last week showed the country’s trade deficit hit a new record high in November at $3.78 billion, higher than the $2.81 billion booked in a comparable year-ago period.
Imports grew to $8.74 billion by 18.5%, while outbound shipments grew at a slower pace to $4.96 billion by 1.6%.
Meanwhile, a second trader said: “Oil is still trading at the high, therefore demands for dollars to buy oil helped the dollar to strengthen against the peso.”
A third trader meanwhile said the local currency depreciated due to “bets of stronger US industrial production data” scheduled for release last night.
For today, one trader said the peso may play within P50.55 to P50.75 against the dollar while the other trader sees the pair trading on a wide range between P50.50 and P50.90. The third trader said the local currency may move within P50.65 to P50.85-to-the-dollar.
“The dollar remains to be weak against the major currencies, but if we see some pickup in the US dollar, I guess this will fuel dollar-peso buying,” the first trader said.
Most Asian currencies also slipped on Wednesday as the dollar rebounded from a three-year low.
The dollar index against a basket of six major currencies was up 0.2% at 90.569 after hitting its lowest since December 2014 at 90.113. — Karl Angelo N. Vidal with Reuters
