The peso weakened against the dollar to its fresh 12-year low on Wednesday, Sept. 5, following the faster-than-expected August inflation print.
The local currency ended Wednesday’s session at P53.55 versus the greenback, a centavo and a half weaker than the P53.535-per-dollar finish on Tuesday.
This was the peso’s fresh low in more than 12 years since it closed at P53.575 against the dollar on June 28, 2006.
The peso traded sideways the whole day, opening the session at P53.535. It slid to as low as P53.56, while its best showing for the day stood at P53.51.
Dollars traded soared to $1.38 billion from just $440.75 million that exchanged hands the previous day.
A foreign exchange trader said the peso weakened slightly as it continued to move within a very tight range.
“There’s a lot of trading today, but still the exchange rate continued to be pegged at around P53.55,” the trader said in a phone interview Wednesday.
He added that the August inflation print “was a big surprise,” boosting investors’ speculation of another rate hike from the Bangko Sentral ng Pilipinas.
Inflation accelerated to a fresh nine-year high of 6.4% in August, the Philippine Statistics Authority reported Wednesday, coming from July’s 5.7% and from 2.6% in August 2017.
The pickup in inflation last month was mainly attributed to the prices of food as well as alcoholic beverages and tobacco.
In a statement, the central bank said it will be “looking more closely” at the latest data to reassess the medium-term inflation path. — Karl Angelo N. Vidal