Home Top News Peso drops further vs the dollar

Peso drops further vs the dollar

by
0 comment
BW FILE PHOTO

THE PESO dropped further on Tuesday as the dollar was broadly stronger amid rising US yields.

The local unit closed at P58.795 per dollar on Tuesday, weakening by 14.5 centavos from its P58.65 finish on Monday, Bankers Association of the Philippines data showed.

The peso opened Tuesday’s session weaker at P58.75. Its worst showing was at P58.84, while its intraday best was at P58.735 versus the greenback.

Dollars exchanged inched down to $915.14 million on Tuesday from $920.83 million on Monday.

The peso declined as the dollar was boosted by safe-haven demand due to negative sentiment regarding elections in France and in the United States, a trader said by phone.

“The gauge of the US dollar versus global currencies was among two-month highs recently due to higher US Treasury yields amid some market speculation that a possible Trump presidency later in 2024 would lead to greater US fiscal deficits and higher US inflation,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort likewise said in a Viber message.

The dollar was supported by rising US yields and the blowtorch was on low-yielding currencies on Tuesday such as China’s yuan and Japan’s yen, which was pinned to its lowest since 1986, Reuters reported.

Benchmark 10-year Treasury yields rose nearly 14 basis points to 4.479% overnight, with analysts attributing the move to expectations of Donald J. Trump winning the US presidency and raising tariffs and government borrowing. On Tuesday, it was last at 4.443% in Asian hours.

The dollar index, which measures the US unit against six rivals, was at 105.93, with the spotlight on jobs opening data due later in the day and comments from Federal Reserve Chair Jerome H. Powell when he takes the stage at the European Central Bank forum in Portugal.

As the dollar rose, the euro handed back part of a small rally as the first round of France’s election turned out more or less in line with polling. The single currency was last 0.11% lower at $1.07287.

The yen sank to 161.745 per dollar on Tuesday, its weakest in nearly 38 years, extending a downward slide driven mainly by a wide gap in interest rates between the US and Japan.

Japan’s finance minister said on Tuesday the authorities were vigilant to sharp currency market moves, but stopped short of giving a clear intervention warning.

For Wednesday, the trader expects the peso to move between P58.50 and P58.90 per dollar, while Mr. Ricafort sees it ranging from P58.65 to P58.85. — AMCS with Reuters

Related Posts

Leave a Comment