The peso sustained its decline against the US dollar Tuesday, after a Federal Reserve official hinted of another rate hike this year and amid the general strength of the greenback against other currencies.
The peso lost P0.26 to close at 51.34 a dollar Tuesday from 51.08 Monday. It was the local currency’s weakest level in 11 years, or since it settled at 51.38 against the greenback on Aug. 25, 2006. Total volume traded improved to $659 million from $292 million a day earlier.
“The US dollar rallied as US-DPRK [Democratic People’s Republic of Korea] rhetoric subsided and Fed Dudley reiterating a possibility of another rate hike this year,” Security Bank Corp. said in its daily market report.
New York Fed President William Dudley, a close ally of Fed Chair Janet Yellen, said in an interview with the Associated Press, he was in “favor of doing another rate hike later this year.”
Business Monitor International, a unit of Fitch Group, said the Philippine peso “has been on a downtrend and is susceptible to further capital outflows in times of rising global interest rates and risk aversion, due to a still-substantial external debt stock [at 24 percent of GDP as of April 2017.”