THE PESO slipped against the dollar on Monday due to strong US employment data, which could support more rate increases from the US Federal Reserve.
The local unit closed at P58.58 versus the dollar on Monday, losing three centavos from its P58.55 finish on Friday, data from the Bankers Association of the Philippines’ website showed.
The peso opened Monday’s session at P58.50 against the dollar. Its weakest point was at P58.59, while its intraday best was at P58.45 versus the greenback.
Dollars exchanged went down to $574.2 million on Monday from $1.11 billion on Friday.
“The peso weakened following the strong US employment reports last Friday, which solidified market views of future Fed rate hikes,” a trader said in an e-mail.
With this, markets are now pricing in a 50-basis-point (bp) increase from the Fed at their Dec. 13-14 meeting, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
US nonfarm payrolls increased 261,000 last month, the Labor department reported on Friday, while September was revised up to 315,000 jobs added, from 263,000 previously reported.
The US unemployment rate increased to 3.7% from 3.5% in September and average hourly earnings increased 0.4% after rising 0.3% in September.
The Fed last week delivered a fourth straight 75-bp hike, bringing total increases since March to 375 bps.
The peso also weakened after China maintained its coronavirus disease 2019 (COVID-19) restrictions, contrary to market hopes of a possible easing, Mr. Ricafort said.
China’s zero-COVID-19 policy includes lockdowns, quarantining and rigorous testing, aimed at stopping the spread of the coronavirus.
For Tuesday, “the local currency might depreciate anew ahead of potentially hawkish remarks from various Fed officials overnight,” the trader said.
Mr. Ricafort gave a forecast range of P58.45 to P58.65 per dollar, while the trader said the peso could move from P58.50 to P58.70. — K.B. Ta-asan
