THE PESO dropped to a three-week low against the dollar on Wednesday before the Bank of the Philippines' (BSP) policy. meeting, where it is expected to cut benchmark rates further.
The local unit closed at P57.16 per dollar, down by nine centavos from its P57.07 finish on Tuesday, Bankers Association of the Philippines data showed. This was the peso’s worst finish since it ended at P57.475 on Aug. 6.
The peso opened the session stronger at P56.93 against the dollar, which was also its intraday high. Meanwhile, it hit a low of P57.23 against the greenback.
Dollars exchanged rose to $1.9 billion on Wednesday from $1.44 billion on Tuesday.
“The US dollar-peso exchange rate corrected slightly higher… partly due to the widely expected 25-basis-point (bp) BSP rate cut tomorrow (Aug. 28) that would bring the interest rate differential between BSP and Federal Reserve rates to 50 bps, the narrowest on record,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort via Viber.
The peso weakened as “dollar demand was fueled by reports saying that Fed Governor Lisa Cook filed a lawsuit that challenged her removal from office,” a trader said by phone.
For Thursday, the trader sees the peso moving between P56.90 and P57.30 per dollar, while Mr. Ricafort expects it to range from P57 to P57.25. — Amc and
