Peso gains vs. USD, PSEi slides anew

MANILA – The Philippine peso recovered against the US dollar Thursday after investors unloaded some dollar holdings but the Philippine Stock Exchange index (PSEi) sustained its slide for the seventh day still due to foreign selling.

The local currency gained P0.20 after finishing the day at 48.34 from 48.54 a day ago.

A trader said some exporters unloaded dollar holdings, thus, the boost on the peso.

The trader expects the local unit to end the year at 49-level against the greenback, which in part is due faster growth of the country's imports because of rising demand of the domestic economy.

"This is positive for the OFWs (Overseas Filipino Workers) and their families," the trader said.

Another factor cited for the weakening of the peso is the rising price of oil products in the international market, which to date is around USD51 per barrel.

A possible increase in the Federal Reserve's key rates is also among the reasons for the volatility of currencies to date.

The trader said the Fed funds futures, which is a contract that allows investors to hedge or speculate on the movement of short-term interest rates based on the adjustments in the Fed rates, now show a 67 percent probability of an increase of Fed rates by December.

"Uncertainties on the timing of the Fed rate hike is what's causing the volatilities in the currency and equities markets but of course there are other factors like domestic developments," the trader said.

The local unit opened the day at 48.53, sideways from the 48.57 a day ago.

It traded between its closing rate and 48.54 bringing the day's average to 48.47.

Volume of trade reached USD719.5 million, higher than the USD713.5 million Wednesday.

The currency pair is seen to trade between 48.30 and 48.60 Friday.

Meanwhile, the PSEi shed another 1.58 percent or 117.64 points to 7,312.18 points.

The indices followed suit, with the All Shares down by 1.36 percent or 60.24 points to 4,369.60 points.

Among the sub-indices, the Property registered the biggest drop of about 4.63 percent followed by the Mining and Oil with 1.40 percent.

The Financials, Holding Firms, Services, and Industrial lost 0.96 percent, 0.92 percent, 0.91 percent, and 0.78 percent, respectively.

Volume of trade reached 1.74 billion amounting to P8.8 billion.

Losers led gainers at 164 to 29 while 44 were unchanged. (PNA)