STOCK PHOTO

The peso again retreated to the 57-level against the US dollar on Wednesday to post its worst finish in nearly two months, as decreasing odds of aggressive rate cuts by the US Federal Reserve (Fed) and escalating Middle East conflict propped up the greenback.

The local currency lost 11.5 centavos to close at 57.02 versus the US dollar, its lowest finish since ending at 57.245 last Aug. 16.

Article continues after this advertisement

It posted an intra-day low of 57.06:$1 as $1.58 billion worth of funds switched hands during the trading session.

FEATURED STORIES BUSINESS National ID gives more Filipinos ‘face value BUSINESS BIZ BUZZ: Unwinding Gogoro … quietly BUSINESS Polvoron maker seeks P500 million capital for expansion

Noel Reyes, chief investment officer for trust and asset management group at Security Bank Corp., said such a weakness stemmed from market reaction to last week’s strong US jobs data, which tempered bets on further hefty easing by the Fed.

The US central bank’s benchmark rate now sits between 4.75 and 5 percent following a jumbo half-point cut in September.

Article continues after this advertisement

“The strong US dollar is still a reaction from reduced probability of aggressive cuts by the Fed after last Friday’s strong numbers, plus lack of follow-through stimulus from China,” Reyes said.

Article continues after this advertisement

A foreign exchange trader shared the same view, but added that the Middle East crisis is also stoking capital flight to safe haven assets like the dollar.

Article continues after this advertisement

“The local currency hit the 57-peso level anew from the combined effect of dollar safe-haven demand emanating from the escalating tensions in the Middle East, including growing market expectations of a softer US rate cut of 25 basis points in November,” the trader said.

“The peso is likely to recover some ground amid a continued softening in US inflation reports later this week,” he added.

Article continues after this advertisement

In a new interview with Global Finance magazine, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said the central bank would continue to take a “data-driven approach” to policymaking amid its ongoing easing cycle.

The timing of Fed’s actions did not play much of a role in the BSP’s decision to cut the local rate by a quarter point in August, Remolona said.

Your subscription could not be saved. Please try again. Your subscription has been successful.

Subscribe to our daily newsletter

SIGN ME UP

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

”The reaction of financial markets to the BSP easing its policy rate earlier than the US Fed has been relatively muted, with the Philippine peso weakening only slightly versus the US dollar right after the recent policy decisionbonustime,” he added.

READ NEXT BSP to expand review of related bank dealings BIZ BUZZ: Gogoro e-scooters: Pull the plug or not? EDITORS' PICK WPS: US missile deployment to PH key for combat readiness – US general SC issues TRO vs Comelec resolution on dismissed public officials UPDATES: 2025 elections precampaign stories DILG identifies 38 hotspots ahead of 2025 polls INQside Look with senatorial aspirant Tito Sotto Sandro Marcos calls out VP Sara Duterte: ‘You crossed the line’ MOST READ SC issues TRO vs Comelec resolution on dismissed public officials Tropical Storm Kristine slightly intensifies; Signal No. 2 in 5 areas LIVE UPDATES: Tropical Storm Kristine Green spaces driving growth: How Filinvest City's Park System enhanced its property value View comments

• to
• back
• bonustime
• peso
• slips