THE PESO continued its decline against the dollar to log a fresh one-month low amid continued risk-off sentiment as market players await the policy decision of the US Federal Reserve.
The local unit ended Tuesday’s session at P53.07 versus the greenback, nine centavos weaker than the P52.98-per-dollar finish on Monday.
This was the peso’s worst showing in more than a month or since it closed at P53.09 per dollar last Nov. 14.
The peso opened the session at P52.98 against the US currency and slipped to a low of P53.07 intraday, which was also yesterday’s closing rate. Meanwhile, its best showing stood at P52.91 versus the dollar.
Trading volume climbed to $790.46 million from the $685.95 million that switched hands the previous day.
Two traders said the peso traded lower versus the dollar as investors are waiting for the last policy meeting of the US central bank, which it holds on Dec. 18-19.
“The market is widely expecting the Fed to raise its interest rates. However, players are more or less looking into next year’s view,” a trader said in a phone interview.
In a Reuters report, the interest rate futures market is pricing in only one policy tightening from the Fed next year, compared with its September projection of three rate hike, since higher borrowing costs will hurt the US growth and ultimately prompt the Fed to pause its policy tightening path.
“As market players remain uncertain to the possible monetary policy path of the US Federal Reserve for next year, local investors flock toward the relatively safe-haven dollar for the meantime,” another trader said in an e-mail.
For today, the first trader expects the peso to trade between P52.90 and P53.10, while the other gave a P52.95-P53.15 range. — KANV

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