PH peso sinks to near 8-year low of P49.20 to $1
MANILA, Philippines – The Philippine peso dropped to an almost 8-year low against the US dollar after the Federal Reserve minutes pointed to a rate hike "relatively soon."
On Monday, November 14, the local currency ended at P49.20:$1, 25 centavos weaker from P48.95:$1 on Friday, November 11.
It was the peso's weakest level against the US dollar since December 4, 2008, when it closed at P49.370:$1.
"The US dollar/Philippine peso jumped higher as the US dollar continued to pummel regional currencies on soaring US Treasury yields," a trader said in an interview. (READ: Philippine stocks plunge to 7-month low on Trump's win)
The US Federal Reserve also released its minutes for September 20-September 21, revealing that several central bankers pointed out the need for a rate hike "relatively soon."
"Chances for a federal rate hike were also bumped up in reaction to comments from Federal Vice Chair [Stanley] Fischer, lending more strength to the US dollar," the trader added.
"Trump's victory is seen to push inflation to an accelerated pace as the economic activity picks up (via deregulation and government spending) and this could be the nail on the coffin on the second phase of the Fed's rate hike cycle," Nicholas Antonio Mapa, BPI associate economist, said in a separate email.
Over the weekend, Fischer appeared supportive of hiking the rate by December.
Other than the Fed rate hike updates and the soaring US Treasury yields, the trader said heavy foreign selling in the local equity market also contributed to the depreciating Philippine peso.
Latest data from the local bourse showed that foreign selling reached P4.68 billion. – Rappler.com