Peso dips anew, closes at 57.135

September 8, 2022

The peso was again weaker against the dollar for the fifth straight day, by 0.135 or 0.2 percent to a new record close for the fourth straight trading day at 57.135 (against the previous day’s 57.00) on Wednesday.

The peso opened at 57.00, at a high of 57.33, a low of 57.00, and close at 57.135, an average of 57.216, a volume of $1.2327 billion.

“Because of the higher dollar against major global currencies on more hawkish Fed signals recently; weaker peso, which depreciated against the dollar by P6.136 or 12 percent since the start of 2022, could lead to higher inflation and more aggressive local policy rate hikes to help stabilize both the peso exchange rate and overall inflation,” Rizal Commercial Banking Corp. chief economist Michael Ricafort told Daily Tribune.

US inflation easing

He said amid market expectations and signals from some Fed officials of more rate hikes for longer to bring down elevated US inflation; thereby leading to higher US Treasury yields, with the benchmark 10-year US Treasury yield at a new 2.5-month high of 3.33 percent, which also supported sentiment on the US currency in terms of higher US interest rate income.

“The peso also weaker after the local stock market, the PSEi, corrected lower for the second day in three days, 155.52 points or 2.3 percent to close at 6,554.08, new lows in nearly a month (since August 11, 2022); but still near three-month highs nevertheless,” Ricafort added.

“Offsetting positive factor for the peso: Global crude oil prices declined to new seven-month lows or since 26 January 2022 (Nymex at $85 per barrel levels), which could reduce the country’s oil import bill, narrow the trade deficit, and could somewhat help ease inflationary pressures,” the economist said.

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