Peso weakens anew in thin trade due to virus
THE PESO weakened anew against the dollar on Monday amid risk-off sentiment in the market after a stimulus bill to battle the economic impact of the coronavirus disease 2019 (COVID-19) was blocked in the US Senate.
The local unit finished trading at P51.33 against the greenback on Monday, shedding 36 centavos from its P50.97 close on Friday, according to data from the Bankers Association of the Philippines.
The peso opened the session sharply weaker at P51.15 per dollar. Its weakest showing for the day its close of P51.33, while its intraday best was at P51.11 against the greenback.
Dollars traded dropped to $422.70 million on Monday from $576 million last Friday.
A trader said peso weakened due to a decline in dollar selling.
“I think we saw the flows run out from what we saw last week when many were selling dollars,” the trader said in a phone call.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso tumbled due to risk-off sentiment as a stimulus bill in the US was blocked.
“The peso exchange rate closed weaker amid continued volatility after Democrats blocked the US Senate stimulus bill,” Mr. Ricafort said in a text message.
Reuters reported that Democrats blocked a Republican-sponsored measure for a coronavirus stimulus package in the US.
The bill, if enacted, would provide financial aid to US airports, transit systems, and passenger railroad Amtrak.
Meanwhile it would also give a $50-billion credit line to embattled US airlines.
St. Louis Federal Reserve President James Bullard has said the virus could have a potential economic impact of $2.5 trillion on the US economy and has warned that the US jobless rate could soar to 30%.
The virus has already sickened more than 330,000 across the world, with deaths reaching more than 14,000.
In the Philippines, COVID-19 cases rose to 396 as of Monday morning, with 33 deaths and 18 recoveries.
For today, the trader expects the peso to move within P51-P51.50 versus the dollar, while Mr. Ricafort sees the local unit moving around the P51.10-P51.40 band. — L.W.T. Noble with Reuters
