Peso sinks to fresh 17-month low: P57.78:$1

The Philippine peso depreciated against the US dollar on Thursday to carve a fresh 17-month low, as the greenback was buoyed by economic data and the surprise policy adjustment in Indonesia.

The local currency lost 23 centavos to close at P57.78:$1 from Wednesday’s finish of P57.55:$1.

The latest showing is the weakest in 17 months since November 10, 2022’s P58.19:$1, surpassing the previous high recorded last Friday, April 19, 2024.

Security Bank Corp. chief economist Robert Dan Roces attributed Thursday’s movement to the release of economic data showing that new orders for American-made capital goods posted a slight expansion in March.

“The currency pair experienced faster upward momentum following the release of better-than-expected US Durable Goods data, and likely some knee-jerk reaction from Indonesia’s surprise rate hike,” he said in a mobile message.

This comes as Indonesia’s central bank hiked interest rates by 25 basis points to a seven-year high of 6.25%, in an unexpected move in efforts to strengthen the rupiah which has also continued to soften against the US dollar.

Roces’ remarks were mirrored by Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort, who also cited the recent performance of the Japanese yen, which fell to its weakest level against the dollar since June 1990 on Wednesday.

“The US dollar/peso exchange rate higher for the second straight day… ahead of the latest US GDP and personal consumption expenditure inflation data later this week as a source of new market leads,” he said in a separate mobile message.

In a statement, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona reiterated the remarks he made last week that the peso’s performance was not poor as it was more a reflection of the dollar’s strength.

“The story has been one of dollar strength rather than peso weakness. Escalating tensions in the Middle East led to safe-haven flows into the US dollar at the expense of most other currencies,” he said.

“Nevertheless, the BSP continues to monitor the market and stands ready to manage any unnecessary movement and excessive volatility,” he added. — RSJ/VBL, GMA Integrated News