The peso again posted a fresh low against the US dollar and neared the 53 level on Monday, pulled down mainly by investors’ anticipation of what will transpire during the Federal Open Market Committee meeting on Wednesday.
The local currency lost P0.25 to close at 52.95 from 52.70 on Friday. It was its weakest level in almost 12 years since 52.98 on July 3, 2006. Total volume traded reached $653 million, lower than $724 million on Friday.
“Investors are playing safe ahead of the FOMC meeting which strengthened the greenback,” Astro del Castillo, president and managing director of First Grade Finance Inc., a finance and investment company, said in a phone interview.
Del Castillo also said the peso’s weakness could also be traced to the possible strong demand for the US dollar because of the two holidays this week—the Independence Day on June 12 and the Feast of Ramadan on Friday.
“Investors will remain cautious ahead of the central banks meetings this week,” he said, referring the US Federal Reserve and the European Central Bank.
But Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. downplayed the peso’s current level, saying the “FX market is naturally volatile.”
Economists earlier predicted the US Federal Reserve might increase interest rates again within the year, a scenario that has been affecting most currencies, including the peso.
Earlier, Espenilla was unperturbed by the peso’s decline, saying it was natural for the currency to move up and down.
“That is market… It goes up and down. What can I say,” Espenilla said in reply to a query. He added that he was not worried on the current level of the peso. Julito G. Rada