THE PESO dipped against the dollar on Monday dragged by risk off sentiment amid concerns of a slowdown in the global economy.
The local unit ended Monday’s session at P52.52 versus the greenback, 20 centavos weaker than the P52.32-per-dollar finish last Friday.
The peso opened the session weaker at P52.55 per greenback, sliding to as low as P52.66 intraday. Meanwhile, its best showing of the day stood at P52.49 per dollar.
Trading volume thinned to $886.2 million from the $1.18 billion that changed hands the previous day.
“The local currency depreciated on safe haven demand due to weaker-than-expected manufacturing and services data from the US and eurozone last Friday, raising fears of a global economic growth slowdown,” a trader said in an e-mail on Monday.
Germany, Europe’s largest economy, posted sharper contraction in terms of manufacturing activity, increasing worries on decelerating growth in the currency bloc.
This was mirrored in the manufacturing output in the European region, posting the biggest contraction since December 2012.
Traders said that concerns over slowing global economic growth spilled over in Asian markets.
“We saw risk-off sentiment given that equity markets in Asia are all down by an average of 2%,” a second trader said.
The bellwether Philippine Stock Exchange index declined by 1.88% yesterday to close at 7863.02, dragged by holding firms (down 2.74%) as well as mining and oil companies (down 2.38%).
For today, the first trader expects the peso to move between P52.35 and P52.65, while the other gave a P52.30-P52.70 range.
“The peso might weaken further on sustained risk-off sentiment as the weaker global data solidified the softer economic outlooks from major central banks abroad,” the first trader noted. — K.A.N. Vidal