Peso weakens as dollar climbs vs major units

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THE PESO dropped as the climb in US Treasuries supported the dollar.

THE PESO weakened on Thursday as the dollar strengthened on the back of a jump in US Treasury yields.

The local unit closed the session at P54.32 versus the greenback, 14 centavos weaker than the P54.18-per-dollar finish on Wednesday.

The peso traded weaker the whole day, opening the session at P54.27, which was also its best showing for the day. Meanwhile, it traded as low as P54.41 per US currency intraday.

Trading volume surged to $893.1 million from the $725.2 million that switched hands the previous day.

A foreign exchange trader said the peso declined as the dollar strengthened versus major currencies yesterday.

“We’re continuing to see strong dollar move and this was due to a number of factors. The US economy remains strong as we saw good data last night,” the trader said in a phone interview.

Reuters reported that the Institute for Supply Management’s non-manufacturing activity index jumped 3.1 points to 61.6 last month, the highest reading since August 1997. Meanwhile, the ADP National Employment Report showed private payrolls climbed 230,000 jobs in September.

The positive employment data pushed the benchmark 10-year US Treasury yields to rise nearly 12 basis points to 3.23%, its highest levels since mid-2011.

“This uptick [in jobs data] suggests that [non-farm payroll data] will also be strong this Friday,” the trader added.

Meanwhile, another trader added the jobs data “increased bets of a December Fed (Federal Reserve) rate hike.”

“The slew of positive developments in the US gave support to the dollar in general,” the first trader said. “With the better trend in the US, we’re also seeing weakness in other countries.”

For Friday, the first trader expects the peso to trade between P54.30 and P54.40, while the other gave a P54.30-P54.50 range. — K.A.N. Vidal