The peso touched the 50-a-dollar level for the second time this year, closing at near a 10-year low, while stocks slid for a fourth day, as traders were spooked by geopolitical concerns following deadly attacks in Europe and prospects of further interest rate hikes in the US next year.
The peso lost three centavos to close at 49.999 a dollar Tuesday, the weakest in over a decade or since it settled at 50.12 a greenback on Nov. 16, 2006. It reached an intra-day low of 50 a dollar, on volume turnover of $363.80 million.
The last time the peso breached the 50-a-dollar barrier was Nov. 24, 2016.
“What we know is there is higher demand for dollars… It is also possible that there is high demand for dollars for debt servicing,” Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said in a briefing Tuesday.
Meanwhile, the euro retreated against the dollar after at least 12 people were killed and dozens injured late Monday when a lorry was driven into a packed Berlin Christmas market in what police said was “a probable terrorist attack”.
That came after an off-duty policeman shot dead Russia’s ambassador to Turkey in Ankara, prompting a vow from President Vladimir Putin to step up the fight against “terrorism”. Also Monday, three people were hurt in a gun attack on a mosque in Zurich.
The incidents led to a promise by US President-elect Donald Trump to wipe “terrorists” off the face of the Earth.
“There are some investors who might see something like the assassination in Turkey and the potential terror attack in Berlin as opportunities to lock in profits with a couple of weeks left in the year,” Philip Orlando, chief equities strategist at Federated Investors, in New York, told Bloomberg News.
The Philippine Stock Exchange index, the 30-company benchmark, shed 55 points, or 0.8 percent, to close at 6,658.66 Tuesday, the lowest in 10 months.
The heavier index, representing all shares, also tumbled 26 points, or 0.7 percent, to settle at 4,072.85, on a value turnover of P6.8 billion. Losers outnumbered gainers, 132 to 51, while 42 issues were unchanged.
Eight of the 20 most active stocks ended in the green, led by property developer Megaworld Corp. which climbed 4.6 percent to P3.45 and Metropolitan Bank & Trust Co. which gained 1.4 percent to P71.
Other Asian markets also closed lower. Hong Kong was 0.6 percent lower in the afternoon while Shanghai ended down 0.5 percent, with mainland Chinese investors fret over a weakening yuan and rising bond yields that are making borrowing more costly.
Jakarta fell 0.3 percent and Kuala Lumpur lost 0.2 percent while Bangkok and Mumbai were also well down.
However, Tokyo ended 0.5 percent higher after the Bank of Japan held fire on its stimulus but gave an upbeat view of the world’s number-three economy as exports pick up on the back of a weaker yen. The Nikkei fell slightly Monday for the first time after a nine-day rally.
Sydney added 0.5 percent and Seoul gained 0.2 percent while Taipei and Wellington were flat.
The yen has fallen more than 17 percent against the greenback since Trump’s shock US presidential election win in November fanned speculation that his plans for big government spending and tax cuts will force the Federal Reserve to hike borrowing costs.
The Fed last week raised interest rates for the first time in a year, and only the second time since the 2008 financial crisis. The Fed also hinted of three additional rates increase next year, higher than the previous expectations of two rate hikes. With AFP, Bloomberg