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Peso weakens amid uncertainty over Brexit, US gov’t shutdown

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THE peso declined further against the dollar on Friday due to continued concerns over the UK’s exit from the European Union as well as the partial US government shutdown.

The peso ended the week at P52.515 versus the greenback, down from the P52.41-per-dollar finish last Thusday.

The peso opened the session stronger at P52.40, hitting a high of P52.35 intraday. It was weakest at P52.55.

Trading volume thinned to $807.22 million from $932.22 million the previous day.




A foreign exchange trader said the peso slid further as the strong momentum for the dollar persisted.

“We closed above the P52.50 level, which is significant because it is a strong resistance level,” the trader said in a phone interview.

He added that the peso moved lower again even as market players piled up their remittance coverage for the weekend.

“Still, market factors remain headline-driven such as the Brexit deal and the shutdown of the US government.”

On Wednesday, British Prime Minister Theresa May won a confidence vote in Parliament after the chamber rejected her proposed Brexit deal with the EU. The rejection of the plan means she can remain in place to negotiate a better deal with the EU, though the prospects that the EU will budge are slim.

Meanwhile, the US government shutdown, the longest in recent history, is still ongoing, even as US President Donald J. Trump enacted a law on Wednesday granting some 800,000 federal employees back pay.

Ruben Carlo O. Asuncion, UnionBank of the Philippines chief economist, said the “perception that the US economy is doing well” drove the dollar’s ascent.

“Optimism about world trade might have also weighed in,” Mr. Asuncion added, citing the recent developments in the US-China trade talks. — Karl Angelo N. Vidal