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Friday, March 29, 2024

Peso languishes at 54 per US dollar

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The peso barely rose Thursday to stay at the 54-per-dollar level, the weakest in nearly 13 years, despite the strong rebound of the stock market.

The local currency gained P0.05 to close at 54.07 against the greenback Thursday on a trading volume of $658 million, after slumping at 54.14 a dollar Wednesday.  

BDO Unibank Inc. chief market strategist Jonathan Ravelas noted in a social media post the strong dollar momentum. 

“With close above the 54 levels, it now puts the 54.50 resistance levels [of the peso] within striking distance in the near-term. Next resistance after 54.50 is 55,” said Ravelas.

Peter Lundgreen, the chief executive of Copenhagen-based investment advisory firm Lundgreen’s Capital, said the peso would likely end 2018 at 55 per US dollar.

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He said the monetary tightening by the US Federal Reserve would put pressure on the peso and other emerging market currencies toward the end of the year.

The peso hit an all-time low of 56.34 against the dollar in October 2014.

Guian Dumalagan, economist of Land Bank of the Philippines, said the financial market volatility was mostly due to the “renewed trade tension as China lodged permission with the World Trade Organization to levy tariff on the US.”

Dumalagan said other contributors to the weak peso were the developments in Europe after France cut its economic growth estimate for this year and next to 1.7 percent from 2 percent and 1.9 percent, respectively.

The widening trade gap also contributed to the weakness of the peso that was battered by the surging dollar in the past few months.

The Philippine Statistics Authority reported Tuesday that the country’s balance of trade-in-goods’ deficit widened by 171 percent in July to $3.55 billion from a shortfall of $1.31 billion a year ago, as imports jumped 31.6 percent while exports barely grew 0.3 percent.

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