Peso closes at 50 per $1, weakest since Nov. 2006

The peso closed last week at 50 per $1, its weakest level since November 2006 due to the lower-than-expected initial jobless claims in the US along with sustained rise of US Treasury rates. 

The stock index also closed down on Friday.

The local currency is also at its weakest after the 50.12 per dollar on Nov. 16, 2006. The peso value fell from Thursday’s 49.97 per dollar.

A trader said mid-month corporate demand for the US dollar was also another factor to the peso’s weakness.

Also, BPI lead economist Emilio S. Neri Jr. said “importers appear to have a more significant-than-usual demand while the regular sellers were not as active in today’s trading session.”

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said external uncertainties continued to impact on the peso.

”And despite market uncertainty about a March US Fed interest rate hike, there was higher demand from corporates today,” he said.

The BSP official said monetary officials “continue to see negative market sentiment dominating the strong Philippine market fundamentals.”

He, however, stressed that “we should see market reacting to news that OFW remittances remain resilient and growth prospects remain very positive at the back of strong consumption, investment and public expenditures.”

”In real terms, the peso remains competitive. But we continue to monitor pressure from the weak exchange rate, although the domestic inflation has gone down in recent years,” he said.

”There is no substitute to constant monitoring and surveillance for any possible risks in the horizon,” he added.

The peso opened at 49.94 per $1, a dip from the 49.89 in the previous session.

It traded between its closing and opening levels resulting to an average of 49.98.

Volume of trade reached $532 million, higher than the $376.5 million a day ago.

The Philippine Stock Exchange index (PSEi) lost 0.53 percent, or 38.46 points, and finished the week at 7,244.79 points.

All Shares followed with a 0.31 percent or 13.78 points decline to 4,388.01 points.

Only the Financials, among the sectors, ended the week with gains after rising 0.02 percent.

Services contracted by 1.32 percent, Holding Firms, 0.63 percent; Property, 0.27 percent; Mining and Oil, 0.19 percent; and Industrial, 0.04 percent.

Trade volume reached 3.1 billion shares amounting to P6.99 billion.

Losers led gainers at 99 to 93 while 48 shares were unchanged.