The PESO fell further on Tuesday as the dollar was generally stronger amid rising US yields.
The local unit closed at P58.795 per dollar on Tuesday, weakening 14.5 centavos from Monday’s P58.65, data from the Bankers Association of the Philippines showed.
The peso opened Tuesday’s session weaker at P58.75. The worst performance was P58.84, while the intraday high was P58.735 against the dollar.
Dollars exchanged fell from $920.83 million on Monday to $915.14 million on Tuesday.
The peso fell after the dollar was boosted by safe-haven demand following negative sentiment over elections in France and the United States, a trader said by phone.
“The US dollar against global currencies recently hit one of the highest levels in the past two months due to higher US Treasury yields, amid market speculation that a possible Trump presidency could happen later in 2024 lead to larger U.S. budget deficits and higher U.S. inflation,” says Rizal Commercial. Michael L. Ricafort, chief economist at Banking Corp., also said this in a Viber message.
The dollar was supported by rising US yields, with the blow to low-yielding currencies such as the Chinese yuan and Japanese yen falling on Tuesday, which were at their lowest levels since 1986, Reuters reported.
Ten-year U.S. Treasury yields rose nearly 14 basis points overnight to 4.479%, with analysts attributing the move to expectations that Donald J. Trump would win the U.S. presidency and raise rates and government borrowing. Interest rates were last at 4.443% in Asian hours on Tuesday.
The dollar index, which measures the U.S. unit against six rivals, stood at 105.93, highlighted by job opening data due later in the day and comments from Fed Chairman Jerome H. Powell when he takes the podium enters the forum of the European Central Bank. in Portugal.
As the dollar rose, the euro gave back part of a small rally as the first round of French elections appeared to be broadly in line with polls. The common currency was last down 0.11% at $1.07287.
The yen fell to 161.745 per dollar on Tuesday, the weakest in almost 38 years, continuing a downward slide driven mainly by a wide interest rate spread between the US and Japan.
Japan’s finance minister said Tuesday that authorities were alert to sharp moves in the currency market but stopped short of issuing a clear intervention warning.
For Wednesday, the trader expects the peso to move between P58.50 and P58.90 per dollar, while Mr. Ricafort expects it to fluctuate between P58.65 and P58.85. — AMCS of Reuters