Peso slides to P43-to-dollar level as fund owners shift back to US | Inquirer Business

Peso slides to P43-to-dollar level as fund owners shift back to US

MANILA, Philippines—The peso closed weaker at the 43-to-a-dollar territory on Thursday to register its lowest in seven weeks as the improving employment situation in the United States prompted fund owners to dump emerging market assets, such as those from the Philippines.

The local currency closed at 43.01 against the US dollar, down by 13 centavos from the previous day’s finish of 42.88:$1.

ADVERTISEMENT

Intraday high hit 42.92:$1, while intraday low touched 43.17:$1. Volume of trade amounted to $1.16 billion from $1.23 billion previously.

The drop of the peso, which mirrored the movement of other key Asian currencies, came amid anticipation of a report showing that the number of Americans claiming jobless benefits fell further in the week ending March 10.

FEATURED STORIES

Traders said the improving employment situation and rising retail sales in the United States have significantly reduced the chances of the US Federal Reserve infusing more cash into the US economy.

Previously, some of the money pumped in by the US Fed to stimulate growth of the world’s biggest economy was spilling over to emerging markets like the Philippines in the form of portfolio investments.

Without another liquidity infusion, the market expects less foreign portfolio investments in emerging economies and thus depreciation of Asian currencies in the months ahead. In the desire to avoid losses from a likely decline in Asian currencies, some foreign fund owners already pulled out funds from emerging economies, thereby actually realizing the projected deprecation.

The pullout of foreign portfolio investments from emerging Asian markets was reflected in the latest foreign “hot money” report by the Bangko Sentral ng Pilipinas.

The BSP said that in February, foreign portfolio investments registered a net outflow of $305 million, reversing the net inflow of $534 million posted in the same month last year.

“There were heavy sell-offs in PSE-listed securities, primarily due to profit-taking,” the BSP said in a report. It said liquidation of peso-denominated government securities also contributed to the net outflows in February.

Traders said the pullout of investments in peso-denominated securities seen in February was duplicated in Thursday’s foreign exchange trading, when positive news about the US economy prompted more fund owners to shift to dollar-denominated assets.

The business headlines in under one minute

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

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: currencies, economy, Finance, Foreign Exchange, Philippine peso, US dollar
For feedback, complaints, or inquiries, contact us.

Curated business news

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



© Copyright 1997-2023 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.