Peso sinks near 50:$1

MANILA, Philippines - The peso continued to lose steam, almost touching the 50 to $1 level before shedding another five centavos as investors continued to factor in a rate hike by the US Federal Reserve next month.

The peso opened weaker at 49.82 and hit an intra-day low of 49.93 to $1.

The local currency closed at 49.83 from Friday’s 49.78 to $1. This was the lowest level for the peso since closing at 49.99 to $1 on Nov. 20, 2008.

Trading volume thinned to $391.6 million from Friday’s $812.9 million.

In its weekly review, the asset management group of the Bank of the Philippine Islands (BPI) said the peso is seen testing the 50 to $1 level this week as currencies in emerging market currencies continue to weaken against the greenback.

Traders said the December rate hike was cemented further by US Fed chair Janet Yellen’s statements during her congressional testimony.

“With foreign selling expected to continue, we expect the peso to continue falling, potentially testing the 50-level,” BPI said.

A trader said the peso lost steam last week as net foreign selling of local equities continued.

The slippage momentarily lost momentum as cash remittances from overseas Filipinos surprised on the upside while the stronger-than-expected third quarter gross domestic product (GDP) growth helped ease foreign selling in the equities market.

The country’s GDP growth accelerated to 7.1 percent in the third quarter of the year from seven percent in the second quarter amid the strong rebound in the agriculture sector and strong investments.

Another trader said global investors would continue to look for more clarify regarding the policies of US president-elect Donald Trump.