The peso resumed its decline Thursday to a new 10-year low of 50.31 against the US dollar, as financial markets await the next move of the US Federal Reserve in its meeting this month.
The peso lost three centavos to close at 50.31 a dollar, from 50.28 a greenback Wednesday. It was the local currency’s weakest level in more than 10 years, or since it settled at 50.32 a dollar on Sept. 26, 2006. Total trade volume reached $409 million Thursday.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said in a statement that currencies in the emerging market economies, including the peso, were seen to trade sideways as financial markets wait for clarity on the next moves of the US Fed.
Tetangco issued the statement after US President Donald Trump’s speech before the US Congress, where he said he was open to immigration reforms, shifting from his harsh statements on illegal immigration. But Trump did not provide specifics and did not comment on the proposed border adjustment tax to boost exports over imports.
“The Trump speech as I understand didn’t provide much in terms of details. The market will therefore still try to get a feel of how the stimulus will be funded and whether such moves will raise the US inflation path appreciably,” Tetangco said.
“The market may turn its focus again on the Fed and expectations of its next moves. The peso and other EME currencies would likely trade in a relatively narrow band until more clarity comes from US policy makers,” Tetangco said.
