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The Philippine peso has weakened further moving closer to hit its record low in weeks even as the stock market also fell with waning prospects of a US-Iran peace deal drove oil prices up across the globe.
The currency fell by a centavo to Php 60.71 to the dollar, near the Php 60.748 that was recorded at the end of March. At the same time, the benchmark Philippine Stock Exchange index (PSEi) shed 42.34 points, or 0.71 percent, and closed the day at 5,901.15.
The peso opened at its intraday trading high of Php 60.8:$1 and went as low as Php 60.6. Volume reached Php 1.409 billion, up from Friday’s Php 1.383 billion.
According to Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, the local currency weakened as a consequence of increasing crude oil prices following United States president Donald Trump’s call to cut off negotiators’ trips to Pakistan, which is mediating peace talks with Iran.
This was supported by Philstocks Financial Incorporated (PFI) research manager Japhet Tantiangco who cited that peace talks had weighed on the stock market along with expectations of rising inflation and interest rates.
In the meantime, Regina Capital Development Corporation head of sales Luis Limlingan noted that investors are largely staying on the sidelines, weighing macroeconomic risks against near-term growth prospects as inflationary pressures persisted.
Trading activity thinned further, with net value turnover dropping to Php 4.65 billion and foreign investors remaining net sellers with outflows amounting to Php 677.34 million.
Trading Edge Consultancy chief investment strategist Ron Acoba enthused that the market’s weakness could extend over the next one to two quarters with banks and conglomerates under pressure from higher borrowing costs and soft earnings growth.