Peso drops amid broad dollar strength
THE PESO weakened further on Monday as the dollar was generally stronger on the back of election bets in the United States.
The local unit closed at P58.48 per dollar on Monday, weakening by 10 centavos from its P58.38 finish on Friday, Bankers Association of the Philippines data showed.
The peso opened Monday’s session weaker at P58.43 versus the dollar, which was already its intraday best. Its worst showing was at P58.58 versus the greenback.
Dollars exchanged rose to $1.095 billion on Monday from $944.01 million on Friday.
“The peso weekend against the dollar due to risk aversion following the failed assassination attempt on [Republican presidential candidate and former US President Donald J.] Trump over the weekend,” a trader said in a phone interview.
The local unit dropped as “the gauge of the dollar versus major global currencies corrected slightly higher from one-month lows after some market volatility after the failed assassination attempt versus Trump that could bolster his chances of winning the US presidency later this year,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted in a Viber message.
The dollar rose broadly on Monday as trades for a victory by Mr. Trump in the upcoming US elections gathered steam in the wake of an attempted assassination of the former US president, Reuters reported.
Mr. Trump, 78, was holding a campaign rally in Pennsylvania over the weekend when shots rang out, hitting his right ear and leaving his face streaked with blood. His campaign said he was doing well.
Investors reacted by narrowing the odds of a Trump victory come November, which in turn pushed the dollar and US Treasury yields higher on Monday, alongside cryptocurrencies.
The dollar index was little changed at 104.21.
Against the dollar, the euro fell 0.2% to $1.0888, while sterling dipped 0.13% to $1.2973.
Long-dated US bond yields, meanwhile, ticked higher on expectations that a Trump win would see policies that would drive up government debt and stoke inflation.
The benchmark 10-year Treasury yield was last up roughly 3 basis points at 4.2158%.
For Tuesday, the trader expects the peso to move between P58.20 and P58.60 per dollar, while Mr. Ricafort sees it ranging from P58.40 to P58.60. — A.M.C. Sy with Reuters