Peso hits 8-year low

AFP FILE PHOTO

MANILA — The peso on Tuesday hit an eight-year low, closing at 49.85:$1, as the US dollar—a safe haven—continues to strengthen amid global uncertainty.

Tuesday’s close was the weakest since 49.999:$1 recorded on Nov. 20, 2008, at the height of the global financial crisis. The domestic currency further shed two centavos against the greenback from Monday’s 49.83:$1.

At the Philippine Dealing System, the peso reached an intraday low of 49.92:$1 and a high of 49.71:$1 after opening at 49.79:$1.

The total volume traded rose to $520 million from $391.6 million last Monday.

“The US dollar bull run continues, with some currencies trading at multi-year lows against the greenback,” Metrobank Research said in its weekly note to clients.

“With the expected Fed rate hike just around the corner, expect volatility to continue as players adjust for positioning and profit-taking,” Metrobank Research added.

Markets are betting on a US Federal Reserve rate hike next month, after Chair Janet Yellen last week said it would be done “relatively soon.”

“For the US dollar-Philippine peso, the local pair has been printing new year-to-date highs almost everyday with ease as the topside seems to be the path of least resistance. However, the Bangko Sentral ng Pilipinas is becoming more aggressive towards the pivotal 50:$1 level, so the pair may be capped there for now,” according to Metrobank Research.

As such, Metrobank Research expects the US dollar-peso pair to trade within the range of 49-50.5:$1 this week, “with the central bank present on top to regulate the peso’s weakness.”  SFM