The PESO fell to a four-month low against the dollar on Wednesday as Donald J. Trump claimed victory in the US presidential election.
The local unit closed at P58.661 per dollar on Wednesday, weakening 34.6 centavos from Tuesday’s P58.315, data from the Bankers Association of the Philippines showed.
This was the peso’s lowest closing rate in more than four months, or since its closing rate of P58.725 per dollar on July 3.
The peso opened Wednesday’s session weaker at P58.50 against the dollar, already an intraday best. The worst performance was P58.77 against the dollar.
Dollars exchanged rose to $1.91 billion on Wednesday from $1.15 billion on Tuesday.
“The dollar-peso ended higher due to the Trump-led election,” a trader said by phone.
“The peso weakened after US presidential election results pointed to a second term for Trump,” another trader said in an email.
Markets have already priced in a possible Trump victory, leading to a broadly stronger dollar and higher U.S. Treasury yields, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. also in a Viber message.
Investors bought dollars, bitcoin and stocks and sold bonds as Trump claimed victory in the US presidential election and Republicans took control of at least one chamber of Congress, Reuters reported.
U.S. stock futures hit record highs, the dollar rose and Treasury yields rose, while bitcoin breached $75,000 for the first time — all moves that investors see as likely if Trump were to win over Democrat Kamala Harris.
The results so far underscore how one of the most unusual presidential elections in modern American history could have far-reaching consequences for tax and trade policies and American institutions.
The results impact global assets and will shape the outlook for U.S. debt, the strength of the dollar and many of the industries that form the backbone of American business.
Leading up to Tuesday, polls showed a dead heat between the former president and the current vice president. But according to Edison Research, as of 2 a.m. ET, Trump had won the swing states of North Carolina and Georgia and was leading in several others.
Fox News predicted he had won the presidency.
Republicans have also won control of the US Senate, ensuring they will dominate at least one chamber of Congress next year.
Assets whose prices could be helped by Trump’s promises to raise tariffs, cut taxes and cut regulations shone as dealers said cash flowed out of emerging markets and U.S. Treasuries tumbled in anticipation of a ballooning deficit .
Before Thursday, the top trader said the peso could continue to weaken as markets continue to react to the election results and with the US Federal Reserve set to announce its policy decision overnight. The second trader added that potentially slower Philippine gross domestic product (GDP) growth in the third quarter could weigh on the peso. The government will release GDP data on Thursday (November 7).
The first trader sees the peso moving between P58.50 and P59 per dollar, while the second trader expects it to fluctuate between P56.55 and P56.80. Mr. Ricafort forecasts the peso to trade between P58.55 and P58.75. — AMCS of Reuters