Peso weakens further vs dollar
THE PESO declined to a fresh eight-month low against the dollar on Tuesday as the safe-haven greenback remained strong due to concerns over the Chinese economy.
The local currency closed at P56.84 versus the dollar on Tuesday, down by six centavos from Monday鈥檚 P56.78 finish, data from the Bankers Association of the Philippines鈥 website showed.
This was the peso鈥檚 weakest close in over eight months or since its P56.94 per dollar finish on Nov. 23, 2022.
The local unit opened Tuesday鈥檚 session slightly stronger at P56.65 per dollar. Its intraday best was at P56.60, while its weakest showing was at P56.865 against the greenback.
Dollars traded dropped to $1.09 billion on Tuesday from the $1.41 billion on Monday.
The peso declined as the dollar remained among one-month highs, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.
The safe-haven dollar stayed firm against major peers while the yuan sank to a nine-month trough after China鈥檚 central bank unexpectedly cut key policy rates for a second time in three months on Tuesday to shore up the country鈥檚 sputtering economy, Reuters reported.
The dollar index, which measures the currency against six developed market counterparts including the euro and yen, was about flat at 103.08 after hitting a 1-1/2-month high at 103.46 on Monday, buoyed by demand for the safest assets following a spate of disappointing Chinese economic indicators that raised concerns about global growth.
Punctuating those worries, Chinese data on industrial output, retail sales and investment released shortly after the People鈥檚 Bank of China鈥檚 rate cut showed unexpected slowdowns.
鈥淭he peso depreciated ahead of a potentially upbeat US retail sales report tonight,鈥 a trader added in an e-mail on Tuesday.
For Wednesday, the trader said the peso might continue to weaken as the market stays cautious ahead of the Bangko Sentral ng Pilipinas鈥 policy meeting on Thursday.
The trader expects the peso to move between P56.70 and P56.90 per dollar on Wednesday, while Mr. Ricafort sees it ranging from P56.75 to P56.95. 鈥 AMCS with Reuters
