Peso weakens versus dollar with wider trade deficit in November

Peso weakens versus dollar with wider trade deficit in November

THE PESO depreciated to a two-month low against the dollar on Wednesday after the country’s trade deficit widened in November.

The local unit closed at P56.275 per dollar on Wednesday, weakening by 26.5 centavos from its P56.01 finish on Tuesday, based on Bankers Association of the Philippines data.

This was the peso’s worst close in more than two months or since its P56.73-per-dollar close on Oct. 31, 2023.

The peso opened Wednesday’s session at P56.15 against the dollar, which was also its intraday best. Its weakest showing was at P56.41 versus the greenback.

Dollars exchanged rose to $2.55 billion on Wednesday from $2.22 billion on Tuesday.

The peso declined against the dollar after the Philippines’ trade deficit widened in November, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso weakened significantly after the decline in the country’s trade balance in November,” a trader likewise said in a text message.

The Philippines’ trade-in-goods deficit widened by 26.3% to $4.69 billion in November from the $3.72-billion gap a year prior. It was also wider than the revised $4.39-billion deficit in October.

This marks the widest trade deficit in seven months or since the $4.84 billion in April.

In the 11 months through November, the trade deficit reached $48.98 billion, 8.8% narrower than the $53.72-billion gap in the same period in 2022.

The peso was also dragged down by higher global crude oil prices recently, Mr. Ricafort said.

For Thursday, the trader said the peso could recover against the dollar ahead of potentially softer US consumer inflation.

The trader sees the peso moving between P56.05 and P56.30 per dollar on Thursday, while Mr. Ricafort sees it ranging from P56.20 to P56.40. — AMCS