Despite being “one of the worst-performing” Asian currencies to date, the research arm of the Fitch Group on Monday said it expected the peso to still outperform in terms of total return by yearend.
The peso yesterday weakened to 50.545 to $1, an almost 11-year low, from 50.47 last Friday. At the Philippine Dealing System, the peso reached an intraday low of 50.57 and a high of 50.45. It was the weakest close since Sept. 12, 2006’s 50.552:$1.
The total volume traded dropped to $395 million from Friday’s $760.9 million.
In a research note, BMI Research said the peso was one of the worst-performing currencies in Asia year-to-date, having broken support at around 50 to $1 in mid-June, “but it has still outperformed the dollar in total return terms, in line with our expectations.”
“While there is scope for further spot weakness over the coming months given rising real rates in developed markets, we do not expect this weakness to be excessive. Importantly, we are more dovish than market expectations with regards to US interest rates, forecasting no more rate hikes for the rest of the year,” BMI Research added.
As such, BMI Research expects the peso to end the year at 50.20 to $1, weaker than the previous forecast of 50, before further weakening to 50.75 next year. —BEN O. DE VERA