Peso weakens as US stocks drop lifts dollar

The Philippine peso depreciated against the dollar on Friday as the downward correction in US stocks increased the allure of the greenback.

The local currency shed 7.5 centavos to close at P49.485:$1 from Thursday’s finish at 49.41.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso was weaker after “the upward correction in the US dollar versus major Asian/global currencies after the latest healthy profit-taking/downward correction in the US/global stock markets after the latest spike in COVID-19 cases locally, in some US states, and in some countries that could have adverse effects on the economy.”

A report by Reuters said the dollar climbed from a four-week low on Thursday, as a decline in US stocks enhanced the currency’s safe-haven appeal for investors following a surge in new coronavirus cases and a US Supreme Court ruling on President Donald Trump’s financial records.

“Peso also weaker after bigger net foreign selling in the local stock market today,” Ricafort said.

Foreign funds bought P1.917 billion shares and sold P3.323 billion for a net selling position of P1.406 billion.

“Since the start of 2020, the peso exchange rate vs. the US dollar has already appreciated by P1.15 or 2.3%,” Ricafort said. —LDF, GMA News