Peso down on weak China factory output

The Philippine peso on Monday carried the weight of weak China data, losing 4 centavos against the dollar.

The local currency dropped 4 centavos at P47.690:$1 from Friday's 47.650.

"US dollar/Philippine peso moved sideways on two-way interest on Monday with depreciation pressure emanating from disappointing economic (data) from China," Nicholas Antonio T. Mapa, Bank of the Philippine Islands (BPI) associate economist, said in an emailed commentary.

China's purchasing manager's index (PMI) registered at 49.4 in January, down from the 49.7 the previous month.

"The report signals weakness in one of the Philippines’ largest trading partners, which could have a negative effect on the local economy," MetisEtrade noted in another commentary.

"Foreign selling in the local stock market also forced the peso to weaken, although some dealers bought the peso on expectations of foreign flows from easing central banks like the BOJ (Bank of Japan)," Mapa said.

The BOJ last week said it will charge 0.1 percent for excess reserves and added that it may cut rates further if proven necessary, Reuters reported. – VS, GMA News