Peso slips to 51.340:$1 on Fed comments

The Philippine peso slipped further and closer to an 11-year low against the dollar on Tuesday as the probability of another interest rate hike in the US this year bolstered the greenback.

The local currency shed 26 centavos to close at P51.340:$1 from 51.080 on Friday. This is the weakest for the peso since August 25, 2006, when the pair finished at 51.38:$1.

"One Fed chief signaling a probable rate increase this year end as the driver," Union Bank of the Philippines chief economist Ruben Carlo Asuncion told GMA News Online.

According to a report by Reuters, comments from New York Federal Reserve Bank president William Dudley that it was not unreasonable to think the central bank would begin trimming its $4.2 trillion balance sheet in September and add another rate hike this year, provided economic data holds up. It pushed the dollar index to its highest level of the day.

The dollar is climbing again with the receding prospect of US and North Korea tensions, Asuncion added.

In a separate report, Reuters said the dollar firmed up after North Korea's leader signaled he would delay plans to fire a missile near Guam, further easing tensions and prompting investors to move back into riskier assets. — VDS, GMA News