THE PESO succumbed to the greenback on Wednesday amid risk-off sentiment due to a wider budget deficit in April and renewed tensions between the US and China.
The local unit ended trading at P50.68 per dollar, shedding 15 centavos from its P50.53 close on Tuesday, according to data from the Bankers Association of the Philippines.
The currency opened the session at P50.51 per dollar. Its weakest was at its close of P50.68 while its intraday best was at P50.46.
Dollars traded climbed to $856.48 million on Wednesday from the $491.5 million on Tuesday.
The weaker peso came after the release of the April fiscal deficit, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.
“The peso closed to its weakest in a month after the announcement of wider budget deficit data which showed contraction in government revenues and sharp increase in government expenditures,” he said in a text message.
A record fiscal deficit worth P273.9 billion was seen in April, reversing the P86.9-billion budget surplus in the same month in 2019, according to data from the Bureau of the Treasury.
Meanwhile, a trader said risk-off sentiment due to uncertainties caused by the US-China spat took its toll on the peso.
“The peso depreciated as investors remained cautious amid uncertainty over future quarantine policies beyond May 31 and lingering US-China geopolitical tensions,” the trader said in an e-mail.
For Thursday, Mr. Ricafort and the trader expect the peso to move around the P50.55 to P50.75 levels. — L.W.T. Noble with Reuters