Peso seen ending 2015 above 47:$1

THE PESO would likely settle above the 47:$1 level at the end of 2015, according to Dutch financial giant ING.

“The peso ending this year below 47:$1 is increasingly unlikely,” ING Bank Manila senior economist Joey Cuyegkeng said on Tuesday.

The peso slightly strengthened on Tuesday to close at 47.34 to $1 from 47.345 last Monday.

At the Philippine Dealing System, the peso hit an intraday high of 47.34 to a dollar and a low of 47.42. Total volume traded amounted to $497.4 million, down from $514 million at the start of the week.

Citing a recent Bloomberg median forecast, Cuyegkeng said the peso was seen settling at 47.20 to $1 by yearend.

By the end of next year, the peso would have further weakened to 48.1:$1, “an almost 2-percent weakness year-on-year but the range is P44 to P49.50,” he added, citing a separate Bloomberg consensus on Tuesday.

Cuyegkeng noted that last week, Asian currencies including the peso “were on the defensive.”

He said expectations that the US Federal Reserve would finally raise policy rates this week, the weaker Chinese economy and the plunge in commodity prices continued to depress Asian currencies.

“The major focus is on the outcome of the FOMC (Federal Open Market Committee) meeting by midweek this week. FOMC is expected to lift policy rates this week, having prepared the market for such since October and supported by relatively favorable economic reports in housing, services and consumer spending,” he said.

In light of this development, Cuyegkeng said the Philippines’ Monetary Board of the Bangko Sentral ng Pilipinas, among other Asian central banks, would likely maintain policy settings steady at their respective meetings this week. The policy-making board of the BSP will meet tomorrow. Ben O. de Vera