THE PESO inched lower versus the dollar on Wednesday after the government posted a wider budget deficit in August amid lower revenues.
The local unit closed at P48.47 versus the greenback on Wednesday, down by a centavo from its P48.46-per-dollar finish on Tuesday.
The peso opened Wednesday’s session at P48.52 against the dollar. It climbed to a peak at P48.465 during the session and hit an intraday low of P48.54 versus the greenback.
Dollars traded went up to $580.05 million on Wednesday from $548.8 million on Tuesday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso weakened slightly following the release of data showing a wider budget deficit in August.
“The peso was weaker after wider budget deficit data for the month of August due to the coronavirus disease 2019 (COVID-19) and continued decline in government revenues,” Mr. Ricafort said in a text message.
The government’s budget deficit reached P40.1 billion in August, ballooning from the P2.5-billion gap seen in the same month last year, Treasury data released on Wednesday showed. However, last month’s level was lower than the P140.2-billion deficit seen in July.
The August figure brought the eight-month deficit to P740.7 billion, surging by 515% from the P120.4 billion seen in the comparable year-ago period. This has already exceeded the record P660.2-billion gap seen last year.
BDO Unibank, Inc. Chief Market Strategist Jonathan L. Ravelas said in a text message that the dollar strengthened as the US economy continues to show signs of recovery.
The US dollar rose against major currencies on Wednesday, supported by positive US economic data and concerns about a second wave of coronavirus infections in Europe and Britain, Reuters reported.
The dollar index, which pits the dollar against a basket of six major currencies, rose to 94.197 on Wednesday, the highest in two months.
For today, Mr. Ricafort sees the peso moving from P48.40 to P48.55 versus the dollar while Mr. Ravelas expects it to range from P48.30 to P48.60. — KKTJ