Peso falls to fresh record low of 62.40:$1
The peso weakened to another record low yesterday, closing at 62.40 against the dollar as expectations of rising treasury yields in the United States, tighter Federal Reserve policy and elevated oil prices continued to favor the greenback.
The Philippine peso experienced a fresh record low against the US dollar, settling at 62.40:1 on Tuesday, according to the Bankers Association of the Philippines. The depreciation was 13.5 centavos higher than its previous low of 62.265 per dollar on August 28. The local currency began the day at 62.25, its highest level, before falling to as much as 62.40, marking its weakest intraday level.
Ruben Carlo Asuncion, chief economist at UnionBank, attributed the peso's continued decline to overseas developments, particularly a stronger US dollar and higher global borrowing costs. He noted the peso's depreciation to a new record low reflects a strong dollar environment driven by rising US Treasury yields, expectations of a Federal Reserve rate hike, and higher oil prices due to geopolitical tensions in the Middle East.
Michael Ricafort, chief economist at RCBC, pointed to the 10-year US Treasury yield climbing to approximately 4.78 percent, one of its highest levels in over a year, which made dollar-denominated assets more attractive. Federal Reserve Chair Kevin Warsh's warning that US inflation had not yet slowed significantly also reinforced expectations of tight US monetary policy.
Looking ahead, Asuncion suggested the peso could remain under pressure as investors await US economic data and additional indications of the Federal Reserve's policy direction. Despite the weak outlook, he believed dollar inflows from overseas Filipino remittances, business process outsourcing revenues, tourism receipts, and foreign investments could help stabilize the currency against excessive fluctuations.
He concluded that global factors would likely continue to be the primary drivers of the peso's movements in the coming months.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
