By Aaron Michael C. Cy, reporter
Philippine peso slipped Record low of P59.44 per dollar At Wednesday's close, the greenback failed to hold the support seen late last year due to new demand amid heightened geopolitical tensions.
The local currency weakened 9.9 centavos from 59.341 on Tuesday, according to data from the Bankers Association of the Philippines. The closing broke the previous record low of P59.355 set on January 7.
The peso opened Wednesday's trading session weaker at P59.38 against the dollar. Its intraday best P59.35, while it was the worst performer At P59.45 against the greenback.
Dollar turnover declined to $951 million on Wednesday from $999.2 million on Tuesday.
A businessman told on telephone that US President Donald J. Demand for the greenback remained subdued on Wednesday amid geopolitical concerns stemming from tariffs imposed by Trump against Iran and its trading partners.
The trader also cited growing bets for lower rate cuts by the US Federal Reserve this year.
This came as the Trump administration threatened Fed Chairman Jerome H. Powell with criminal charges over his testimony before the US Senate regarding the renovation of the Fed's headquarters in Washington, DC.
Rizal Commercial Banking Corp. chief economist Michael said the peso also took a hit as the local government cut its infrastructure spending target for the year. El Ricafort said in a Viber message.
The Department of Budget and Management cut its infrastructure spending target this year to 4.3% of gross domestic product (GDP) from 5.1% following weak government spending and economic growth last year due to the flood control scandal.
Acting Budget Secretary Rolando U. The lower target translates to about P1.3 trillion in infrastructure outlays, Toledo said Tuesday.
Mr. Ricafort said the peso moved within familiar ranges on Wednesday, indicating possible intervention from the central bank.
“So far, the signs have been consistent [the Bangko Sentral ng Pilipinas (BSP) has] in recent months and has been on intervention for at least more than three years. So, these are familiar levels because the previous record high in more than three years was P59,” he said. Money Talks with Cathy Yang Wednesday on One News.
Angie L., Chief Executive Officer of AIA Investment Management Philippines. Pacis said at the same event that the peso could test the P62 level due to the widening interest rate differential between the Philippines and the US.
“We're really in the camp that, at the moment, based on what we're seeing, maybe a rate cut in February is really iffy, just because the BSP is already within their 2-4% [inflation] Target range,” he said.
BSP Governor Eli M. Remolona, Jr. said last week that a rate cut “remains on the table” but was “unlikely” at the Monetary Board's February 19 meeting. He also said that the BSP is near the end of its easing cycle.
The Monetary Board has cut the rate by 200 basis points from August 2024, bringing the policy rate to a three-year low of 4.5%.
As for Thursday, the trader said market players would await developments on Mr Trump's subpoena against Mr Powell.
The trader said US producer inflation data could also weigh on the peso, which is expected to remain high and could further boost Fed expectations. The data will be released overnight.
The trader sees the peso rising between P59.20 and P59.60 per dollar on Thursday, while Mr. Ricafort expects it to remain between P59.35 and P59.55.