Peso drops 41.5 centavos as Britain leaves Union

The peso nearly touched the P47:$1 territory, wobbling against the safe haven US dollar as news of Britain's vote to leave the European Union roiled financial markets worldwide.

The Brexit sent sterling plunging and hammered equities across the world as turmoil swept through global markets, Reuters said in a report.

The local currency lost 41.5 centavos to close at P46.950 from 46.535 on Thursday.

"Knee-jerk reaction to Brexit and corporate demand for dollar caused the peso to decline," said Jonathan Ravelas, chief market strategist at BDO Unibank Inc.

Guian Dumalagan, market economist at Land Bank of the Philippines, noted UK's exit from the Union may initially show bias in favor of the dollar due to safe-haven buying.

"However, the peso's weakness might not persist since Britain's exit could prompt the Fed to delay its rate hike this year," Dumalagan emphasized.

Nicholas Antonio Mapa, associate economist at the Bank of the Philippine Islands, expected the peso to bounce back by mid next week as markets realize that the Brexit victory lowers the chances for a Federal Reserve rate hike.

Week-on-week, the peso lost 50.5 centavos from P46.445:$1 on June 17. Year-to-date, it gained 11 centavos from P47.060 on December 29, the last trading day of 2015. – VDS, GMA News