Peso sinks to 3-week low

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THE PESO weakened to a three-week low on profit taking.

THE PESO plunged further against the dollar to hit a three-week low on Wednesday on profit taking amid slower inflation print for last month.

The local unit closed at P52.74 versus the greenback yesterday, 22 centavos weaker from the P52.52-per-dollar finish on Tuesday.

This was the peso’s worst showing in almost three weeks or since it closed at P52.805 against the dollar last Nov. 15.

The peso traded weaker the whole day, opening the session at P52.79 per dollar. It slipped to as low as P52.815, while its intraday high stood at P52.64.

Trading volume jumped to $1.283 billion yesterday from the $1.058 billion that exchanged hands last Monday.

A foreign exchange trader said the peso weakened further versus the dollar as it continue to “consolidate within a wide band.”

“We were way past the level of resistance at P52.50, despite the fact that we’re seeing lower dollar against major currencies and some Asian currencies,” the trader said in a phone interview.

“I guess some investors took profits already from the big move we already saw…despite better inflation.”

Inflation printed at 6% in November, slower than the nine-year high print of 6.7% in September and October.

It was also slower than the 6.3% median in a BusinessWorld poll and sits at the lower end of the 5.8-6.6% range from the Bangko Sentral ng Pilipinas.

“The local currency depreciated despite the softer-than-expected local inflation report,” another trader said in an e-mail.

Meanwhile, Rizal Commercial Banking Corp. economist Michael L. Ricafort said the upward correction in global oil prices this week due to possible cut in oil production by Russia and members of the Organization of the Petroleum Exporting Countries “has been a major factor” that caused the peso to correct against the greenback.

For today, the first trader expects the peso to trade between P52.50 and P53 versus the dollar, while the other gave a P52.65-P52.85 range. — Karl Angelo N. Vidal