Peso Plunges to 11-year Low at 50.53; PSEi Down Anew

The Philippine peso plunged to 50.53 against the US dollar Thursday, its lowest in almost 11 years since Sept. 11, 2006 though it was a little change from the 50.50 on Wednesday close.

Share prices also slid amid foreign selling, the second straight day of negative close for the main stock index.

A trader said corporate demand along with flights to safe haven assets on expectations of sustained hikes in the Federal Reserve rates continued to hurt the local currency.

The local currency unit started the day at 50.43, down from the 50.32 in the previous session, which the trader said was affected by hawkish statements from Fed officials, who indicated sustained gradual rate increases given the improvement in US economy.

It was able to strengthen to 50.38 but was pulled to 50.57, resulting to an average of 50.46.

Volume for the day reached USD564.7 million, more than half lower than Wednesday’s USD1.279 million.

The currency pair is seen to trade between 50.40 and 50.60 Friday.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo told reporters Thursday that investors’ expectations for normalization in US interest rates continued to back the US dollar, thus, the weakness of the peso.

Philippine Stock Exchange index (PSEi) slid for the second straight day to 7,788.06 points, down 0.88 percent or 69.12 points.

A trader said foreign selling remain high and continued to drag both the listed shares and the peso.

Philippine Stock Exchange (PSE) data show that foreign selling amounted to PHP4.2 billion Thursday but foreign buying was higher at PHP4.29 billion.

Sell-off was seen across all sectors, with the broader All Shares contracting 0.74 percent, or 34.55 points, to 4,662.65 points.

Services led the sectors in terms of losses after it shed 2.11 percent followed by Property with 1.88 percent.

Mining and Oil shed 0.57 percent, Financials, 0.41 percent; Holding Firms, 0.23 percent; and Industrial, 0.21 percent. Total volume reached 2.53 billion shares Thursday amounting to Php7.78 billion.

Decliners led advancers at 135 to 78 while 40 shares did not move.