Peso hits new all-time low of P57.13: $1, then settles at P56.82 to the green buck

MANILA — Fears on the impact of the Federal Reserve’s tightening moves again hurt the local bourse on September 7, resulting in the negative close of the main index and the further weakening of the peso.

The Philippine Stock Exchange index (PSEi) slid by 2.32 percent, or 155.52 points, to 6,554.08 points.

The Philippine peso, meanwhile, continued its downtrend against the US dollar, hitting its all-time low of P57.135 to $1 on September 7.

It opened the day at 57.00, a depreciation from its 56.888 start in the previous session.

It traded between 57.33 and 57.00, resulting in an average of 57.216.

Volume reached US$1.23 billion, up from the previous day’s US$812.19 million.

The local currency lost 13.5 centavos to close at P57.135:$1 versus Tuesday’s rate of P57.00:$1, which was the previous all-time low. This is the fourth straight trading day that the peso hit record lows.

On Friday, September 9, the Philippine peso, however, settled back to the P56 to $1 level to close at P56.82, ending its six-day losing streak that saw the local currency hit an all-time low of P57.18 on Thursday.

The peso gained 36 centavos against the greenback as the dollar fell against most world currencies.

Peso trading opened at P57.05 against the dollar on Friday, data from the Bankers Association of the Philippines (BAP) showed.

Volume totaled US$1.15 billion, almost the same as the previous day’s level.

In a report, Rizal Commercial Banking Corp. chief economist Michael Ricafort attributed the peso’s performance to “healthy correction”, citing gains in the local bourse, which he said tracked Wall Street.

Ricafort said it is in line with those of other currencies on the general downward correction of the greenback “amid some measures by some Asian central banks to stabilize their respective local currencies after the recent increase in the US dollar amid hawkish signals from the Fed (Federal Reserve) and the European Central Bank.”

He said the drop in oil prices to the lowest level in the past seven to eight months also contributed to the peso’s strength.

Positive domestic economic reports, such as the drop in the August 2022 unemployment rate to its lowest since the pandemic hit, along with the sustained growth of manufacturing data, also backed the peso.

He said the peso’s next resistance level is between P57.25 and P57.50 while its immediate support is between P56.40 and P56.70

Sought for comment, ING Bank Manila chief economist Nicholas Antonio Mapa noted that the depreciation of the peso is in line with other regional peers.

“With inflation likely kicking into higher gear as we head for the winter season, central banks have dug into the sand and vowed to snuff out inflation, seemingly at all costs,” he said in an emailed commentary. (Jenifer T. Santos)