Peso weakens anew to 56:$1 level
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MANILA -The Philippine peso has again breached the 56:$1 threshold, losing 29 centavos to close at 56:14:$1 on April 18 as better-than-expected manufacturing data in the United States came out and as markets anticipate a fresh interest rate hike in the United States in May.
The local currency traded at as weak as 56.23 against the US dollar before ending the day at its weakest in three and a half months or since closing at 56.20:$1 on Dec. 28.
The peso depreciated for the second day in a row since closing at 55.21:$1 on April 14.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso weakened as global global crude oil prices hovered at their highest levels over the past two and a half months.
This was happening more than two weeks after the Organization of Petroleum Exporting Countries and allied producers like Russia announced an output cut of more than one million barrels per day.
OPEC+ announces surprise oil cuts of around 1.16 mbpd from May to year-end
Rate hike
Meanwhile, Singapore-based DBS Group said the US dollar strengthened as fresh US manufacturing data were better than expected.
Also, DBS opined that the US Federal Reserve was moving closer to what is expected as the American central bank’s third 0.25-percentage-point rate hike on May 3.
Also on Tuesday, the Bureau of the Treasury (BTr) resorted to a partial award of a fresh issue of 13-year T-bonds, going for only P19.475 billion out of the P25 billion offered.
National Treasurer Rosalia de Leon told reporters that the auction committee decided in this way because they wanted to align rates with those at the secondary market.
The latest T-bonds carried a coupon of 6.25 percent and fetched an average of 6.24 percent. If a full award were made, the average would have registered 3 basis points higher at 6.27 percent.
At the Bloomberg Valuation Service, corresponding corporate bonds were tagged at 6.281 percent while same tenor government securities were trading at 6.249 percent.
“The auction was 1.95 times oversubscribed as total submitted bids amounted to P48.8 billion,” the BTr said.
In a commentary, The Netherlands-based ING Bank said the US dollar again rallied on the back of a sharp rise in yields from two-year US debt paper.
“Additionally, we speculate whether some of the dollar strength over the last two trading sessions owes to dollar repatriation for the US federal tax deadline of April 18,” ING Bank said. INQ
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