The peso on Friday breached the 53-per-dollar level, its weakest in almost three and a half years, as financial markets expect a more aggressive rate hike by the US Federal Reserve next week.
The peso lost five centavos to close at 53 against the greenback, down from 52.95 on Thursday. It was the local currency’s lowest level since 53.10 on Dec. 20, 2018. Total volume turnover reached $949.3 million.
“[The] higher USD-PHP is likely due to market players anticipating the 50 bps rate hike from the Fed next week,” China Banking Corp. chief economist Domini Velasquez said in a statement.
“Generally, we still see USD-PHP moving upwards both because of the Fed’s aggressive monetary tightening cycle and domestically, the value of import purchases are still bound [to] increase as oil and food prices continue to remain elevated. Hence, [there is] still more demand for dollars,” Velasquez said.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said the market sentiment also weighed on the peso as global crude oil prices posted new three-month highs of over $120 per barrel.