THE PESO weakened further against the greenback on Wednesday on risk-off sentiment following the stock market’s decline and amid concerns over rising commodity prices.
The local unit finished trading at P48.38 per dollar on Wednesday, losing 13 centavos from Tuesday’s close of P48.25, data from the Bankers Association of the Philippines showed. This was its weakest finish since Nov. 4 when it closed at P48.40.
The peso opened the session at P48.30 versus the dollar. Its low for the day was at P48.47 while its intraday best was at P48.222 against the greenback. Dollars traded climbed to $1.387 billion from $1.039 billion from Tuesday.
The peso depreciated amid some weakness in the local stock market on Wednesday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
The bellwether Philippine Stock Exchange Index inched down by 77.63 points or 1.1% to 6,966.43 on Wednesday.
Meanwhile, a trader attributed the local unit’s depreciation to concerns over rising inflation.
“The peso weakened significantly for the second day from elevated inflation concerns amid rising oil prices and local food supply constraints,” the trader said in an e-mail.
The central bank last week raised its inflation forecast for the year to 4% from 3.2% as it expects sustained pressure from rising food and oil prices in the coming months due to supply constraints and base effects.
Inflation has been climbing since October, spiking to a two-year high of 4.2% in January.
For Thursday, Mr. Ricafort gave a forecast range of P48.30 to P48.45 per dollar while the trader expects a slightly wider band of 48.25 and 48.45. — LWTN