BIZ-FOREX: MANILA- Peso nears 54:$1 mark
The local currency closed at 53.94 yesterday from Monday’s close of 53.88 to $1.
MANILA, Philippines — The peso continues to flirt with the 54 to $1 level, shedding another six centavos to close at its lowest level in almost 13 years on concerns about the worsening trade war between the US and China, emerging market contagion as well as the widening trade gap and runaway inflation on the domestic front.
The local currency closed at 53.94 yesterday from Monday’s close of 53.88 to $1.
This was the lowest level for the peso since closing at 53.98 to $1 on Dec. 5, 2005.
The peso is the third weakest currency in the world after the Indian rupee and Indonesia rupiah, shedding more than seven percent since the start of the year.
The peso hit an intraday low of 53.97 to $1 in the morning session and hit an intraday high of 53.87 in the afternoon trading. Volume was almost unchanged at $434.1 million from Monday’s level of $434.9 million.
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Nicholas Mapa, senior economist at ING Bank Manila, said the trade deficit in the Philippines widened in July and was the third worst on record as imports surged by 32 percent while exports eked out a dismal 0.3 percent gain.
Mapa said the $3.55 billion shortfall in July was the third worst trade deficit on record and also the third worst trade deficit during the Duterte administration.
The worst trade deficit of $3.97 billion was posted last December, while the second worst was last May at $3.69 billion.
This brought the trade shortfall to $22.5 billion in the first seven months of the year, 72 percent wider than the deficit of $13.1 billion in the same period last year.
“The weak Philippine peso contributed to the weak trade performance. The peso depreciated by 5.5 percent in July, by an average 4.3 percent for the seven-month period and by six percent for the year to the end of July,” he said.
Jonathan Ravelas, chief market strategist at BDO Unibank, said the local currency continues to weaken due to the strong momentum of the dollar.
“With the key break of the 53.55 resistance level, expect further tests toward the 54 level. Only a move below the 53.55 will signal more peso appreciation towards 53 level,” Ravelas said. / The Philippine Star.
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