Peso weakens to lowest level in more than 18-months; stocks end sideways

[ASEAN NOW News]

 

MANILA – The peso declined yesterday to its lowest level in more than a year, due to general strength of the greenback on possible Federal Reserve easing.

 

The local stock barometer ended sideways as investors weighed options before the third quarter’s end. 

 

The local currency depreciated for the fourth consecutive trading day against the US dollar after finishing the week’s first trading day at 51.00 from 50.65 last Friday. 

 

Its weakness showed early on after it opened the day at 50.72 from the previous session’s 50.32. 

 

It traded between 50.72 and 51.00, resulting in an average of 50.921. 

 

Volume totaled USD1.26 billion, higher than the USD1.19 billion in the previous trading day. 

 

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the peso’s close on Monday is the weakest since its 51.07 finish on March 26, 2020. 

 

Ricafort attributed the peso’s performance to the “more hawkish signs from Fed/FOMC (US Federal Reserve/Federal Open Market Committee) officials on tapering of bond purchases and possible Fed rate hikes starting 2022.” 

 

He said the recent statements from Fed executives sent the US dollar to its one-month highs. 

 

Other factors for the local currency’s weakness are the uptick in local, US, and global bond yields; hike of oil prices in the international market; net foreign selling in the local stocks market; possible quarantine level easing in the National Capital Region (NCR) from the current Alert Level 4; and concerns on the China Evergrande issue, he said. 

 

Ricafort forecasts the peso to trade between 50.80 to 51.10 to a US dollar on Tuesday, with the support level eyed between 50.50 and 50.60.

 

Meanwhile, the Philippine Stock Exchange index (PSEi) rose by 0.07 percent, or 4.73 points, to 6,956.26 points.

 

All Shares followed with a jump of 0.15 percent, or 6.31 points, to 4,329.95 points. 

 

Half of the sectoral gauges also rose during the day including Services, 1.29 percent; Holding Firms, 0.22 percent; and Industrial, 0.12 percent. 

 

On the other hand, Mining and Oil lost 2.04 percent, Financials, 1.07 percent, and Property, 0.83 percent. 

 

Volume totaled 1.64 billion shares amounting to PHP7.61 billion.

 

Decliners led advancers at 120 to 78, while 42 shares were unchanged.

 

“Philippines shares traded flat as funds transferred to different sectors in anticipation of the latest window dressing for the quarter end,” said Luis Limlingan, Regina Capital Development Corporation head of sales. (PNA)