THE PESO slipped to a one-month low on Friday, reacting to the central bank’s decision to keep rates steady and as the dollar picked up across the board in reaction to events in China and Europe.
The local unit weakened to P52.88 versus the greenback, down 26 centavos from the P52.62 finish on Thursday. This is the peso’s weakest showing since a P53.09 finish in Nov. 14.
The peso traded generally weaker on Friday, opening at P52.66 which was its best showing for the day. The currency touched a low of P52.90 before settling at the closing rate.
Dollars traded on Friday reached $677.75 million, lower than the $697.65 million which exchanged hands the previous day.
Two traders attributed the currency’s movements to a stronger dollar in light of offshore developments, plus the decision of the Bangko Sentral ng Pilipinas (BSP) to end its tightening cycle for domestic interest rates.
“The peso traded higher, which is possibly a reflection of the unchanged interest rate and at the same time news from China data. Demand for dollar was strong across the board,” one trader said in a phone interview.
The BSP voted to keep benchmark interest rates unchanged on Thursday, noting that inflation is expected to trek a “lower path” over the next two years as oil and food prices are on their way down. A second trader said this is a “minus” for the peso.
Meanwhile, Reuters reported weak factory output and retail sales data for November to settle below expectations.
Another trader said the greenback also drew strength from a weaker pound sterling, as the United Kingdom faces a deadlock in forging its “Brexit” deal to break away from the European Union.
“I assume also that seasonal flows are trickling in already — it’s the repatriation of funds of multinationals to their mother country,” the second trader said. — Melissa Luz T. Lopez

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