Home Banking & Finance Peso sinks to P52:$1 level on data
Peso sinks to P52:$1 level on data
THE PESO sank below the P52-per-dollar level on Wednesday amid market caution ahead of the release of Japan and Eurozone’s economic growth data as well as the pivotal US consumer price index (CPI).
The local currency ended Wednesday’s session at P52.12 against the greenback, plunging 14 centavos from its P51.98-to-a-dollar finish on Tuesday.
This was a fresh low for the peso as it was its worst finish in more than 11 years or since it ended at P52.165 against the greenback on July 21, 2006.
The peso opened the session at P52.03 to the dollar. Its worst showing for the day was seen at its closing at P52.12, while its intraday peak was at P51.905 against the US currency.
Dollars traded declined to $939.9 million on Wednesday from the $1.02 billion that changed hands in the previous session.
“The peso breached the P52 level [yesterday]… as Eurozone and Japan GDP (gross domestic product) figures, which can weaken the dollar’s strength, are seen otherwise to likely come softer,” a trader said in an e-mail.
Meanwhile, two traders said the local unit weakened as market players wait for US CPI data, a gauge used to measure inflation. Market players worry that if inflation continues to rise, the US Federal Reserve will be inclined to hike its rates more aggressively.
To add, a third trader said there was dollar selling in the morning due to expected remittance inflows this weekend, driving the peso to its P51.905-per-dollar high.
For Thursday, Feb. 15, a trader sees the peso moving between P51.90 and P52.20 against the greenback, while the second trader gave a P51.95-P52.20 reading.
The other trader, meanwhile, sees the peso moving within a wider range of P51.80 to P52.20 versus the dollar.
“The peso might recover…as the market would likely to lock in recent gains from the stronger dollar this week,” the first trader noted.
In contrast, most Asian currencies strengthened on Wednesday as the dollar fell ahead of US inflation data that could raise or lower expectations of faster rate hikes globally.
The greenback fell 0.3% against a basket of currencies with investors on edge ahead of CPI numbers. Headline consumer price inflation is expected to slow to an annual 1.9% and core inflation to 1.7%. — KANV with Reuters