The peso weakened against the dollar on Tuesday, May 29, anew as geopolitical uncertainties in Europe rose.
The local currency ended Tuesday’s session at P52.64 versus the greenback, down by 15 centavos from the P52.49-per-dollar finish the previous day.
The peso traded weaker the whole day, opening the session declining at P52.55 against the dollar. It slipped to as low as P52.67, while its intraday high stood at P52.51.
Dollars traded rose to $712.05 million from the $637.4 million that changed hands on Monday.
Traders interviewed on Tuesday said the peso depreciated due to the
“geopolitical uncertainties in the Eurozone, particularly in Italy and Spain.”
According to a Reuters report, the election campaign in Italy could focus on the country’s membership to European institutions after the anti-establishment 5-Star and League parties abandoned plans to form a government, causing fear from investors.
In addition, Spanish Prime Minister Mariano Rajoy will face a vote of confidence in his leadership by the end of the week, with corruption allegations hurled at dozens of people in his party threatening his rule.
“If you look at what happened globally, there has been political tensions in Italy and Spain. Because of this, the rate of the peso moved [lower],” a trader said in a phone interview Tuesday.
However, the first trader noted that the peso received some support intraday as oil prices moved lower.
“On the other side of it, the oil prices moved lower. This gave a little bit of support to some Asian currencies which were hit hard because oil prices are moving higher,” he said.
“We got a little bit of reprieve from that because OPEC (Organization of the Petroleum Exporting Countries) is expected to boost supplies going forward.” — Karl Angelo N. Vidal