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The PESO fell to a near-month low on Wednesday, returning to the P56 level against the dollar as the holiday season draws to a close and less cash is needed.
The local currency closed at P56.20 against the greenback, down 30 centavos from Tuesday’s close of P55.90, data from the Bankers Association of the Philippines showed.
This was the peso’s worst finish in almost a month or since it closed at 56.22p against the dollar on December 1st.
The peso opened Wednesday’s trading session at P55.90 per dollar, steady since Tuesday’s close. Its intraday best was just P55.89, while its weakest was P56.30 against the greenback.
Dollars traded rose to $882.85 million from $813.27 million on Tuesday.
The peso fell against the dollar “after the long Christmas holiday weekend and the likely peak and eventual end of holiday-related spending, although there may be another round of increased holiday-related spending, albeit to a lesser extent. in preparation for the upcoming long New Year’s weekend,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
“The seasonal peak in spending for the Christmas holiday and the conversion of expatriate Filipino workers’ remittances into pesos may have occurred just before Christmas, although there may still be some holiday-related spending…before the New Year celebrations,” Mr. Ricafort said.
He said importers could also have used the recently stronger peso to hedge their dollar needs, “particularly in anticipation of a near-term bottom to maximize bargain-hunting opportunities ahead of the Christmas holiday rush.”
Meanwhile, a trader said in a Viber message that the peso fell as the dollar strengthened against most currencies on Wednesday.
The dollar climbed to more than a week’s high against the yen on Wednesday on higher Treasury yields and hopes for a strong recovery in China amid eased coronavirus restrictions.
“Business demand also outweighed the dwindling seasonal inflows. Some coverage of short peso dollar trade positions was also a factor,” the trader added.
For Thursday, Mr. Ricafort sees the peso hovering between P56.10 and P56.35 against the dollar, while the trader gave a broader forecast range of P55.50 to P56.50 given volatile trading. — AMCS