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Peso declines further as US eyes vaccine distribution

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THE PESO weakened further on Thursday as the US government said it was targeting to distribute vaccines against the coronavirus disease 2019 (COVID-19) by the end of October.

The local unit closed at P48.58 versus the greenback on Thursday, down five centavos from its P48.53-a-dollar finish on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened Thursday’s session weaker at P48.57 against the greenback. It climbed to as high as P48.48, while its weakest showing was at P48.59 per dollar.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the peso weakened versus the dollar as the US Centers for Disease Control and Prevention (CDC) told federal governments to hasten the distribution of COVID-19 vaccines.

“Peso was weaker versus the dollar after US stock markets again mostly posted new record highs amid optimism on possible US vaccine for COVID-19 as early as Nov. 1,” Mr. Ricafort said in a text message.

The US Centers for Disease Control and Prevention (CDC) has asked state public health officials to prepare to distribute a potential coronavirus vaccine to high-risk groups as soon as late October, documents published by the agency showed on Wednesday, Reuters reported.

The New York Times had earlier reported that the CDC had contacted officials in all 50 states and five large cities with the planning information.

The documents put online by the New York Times showed the CDC is preparing for one or two vaccines for COVID-19 to be available in limited quantities as soon as late October.

The vaccines would be made available free of cost first to high-risk groups including healthcare workers, national security personnel, and nursing home residents and staff, the agency said in the documents.

Drug developers including Moderna Inc., AstraZeneca Plc and Pfizer, Inc. are leading the race to develop a safe and effective vaccine for the respiratory illness.

The CDC documents describe two vaccine candidates that must be stored at temperatures of minus 70 and minus 20 degrees Celsius. Those storage requirements match profiles of candidates from Pfizer and Moderna.

Meanwhile, a trader said the outlook for the dollar is bearish amid low interest rates in the United States.

“I feel dollar strength may be temporary as majority of players maintain a bearish outlook on the dollar given the US Federal Reserve’s policy outlook of maintaining rates near zero,” the trader said in an e-mail.

The US Federal Reserve last week rolled out a sweeping rewrite of its approach to its dual role of achieving maximum employment and stable prices, putting new weight on bolstering the US labor market and less on worries about too-high inflation, Reuters reported.

The Fed’s new monetary policy strategy, unveiled at the start of an annual central banking conference, pledges to address “shortfalls” from the “broad-based and inclusive goal” of full employment, a nod to research showing racial income disparities hold back economic growth.

For today, Mr. Ricafort expects the peso to range from P48.50 to P48.65 versus the dollar, while the trader sees it moving within P48.40 to P48.70. — K.K.T. Jose with Reuters





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