Peso plunges to new low ahead of ‘likely hawkish’ Fed minutes

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The peso plunged against the dollar anew on Wednesday, May 23, on the back of President Donald J. Trump’s statement on the trade talks between the United States and China.

The local currency closed at P52.47 versus the greenback, 19.5 centavos weaker than the P52.195-per-dollar finish on Tuesday.

This was again the peso’s weakest finish in nearly 12 years since July 19, 2006, where it closed at P52.745.

The peso traded weaker the whole day, opening the session at P52.27 against the US currency. It slipped to a P52.48 low, while its best showing stood at P52.26.

Dollars traded declined to $529.9 million from the $750.65 million that switched hands during the previous session.

A trader said that the peso moved lower due to risk-off move from investors.

“We saw risk-off move the whole day. Market currencies are being sold off, including the peso,” the trader said in a phone interview.

“The market went to safe haven currencies. The emerging markets’ currencies such as the peso are being sold in favor of haven currencies like dollar and yen,” he explained.

Meanwhile, another trader said the peso depreciated to new lows “on market positioning ahead of likely hawkish Fed (US Federal Reserve) policy meeting minutes.”

During its May meeting, the Fed’s Federal Open Market Committee decided to hold their interest rates, although it expressed confidence that the inflation uptick, which is nearing the Fed’s 2% target, would be sustained. — Karl Angelo N. Vidal