The Philippine peso sank past the 63-per-dollar mark for the first time on Thursday, even as the US dollar retreated from an 18-month high despite hotter-than-expected US inflation.
The local currency fell to an intraday low of 63.06 against the dollar during morning trading, according to data from the Bankers Association of the Philippines.
The dollar index, which measures the greenback against a basket of major currencies, slipped 0.1 percent as prudent remarks from Federal Reserve officials and a retreat in US Treasury yields tempered expectations of an October rate hike, Reuters reported.
On Friday, the dollar moved toward its highest level in 18 months on Thursday after minutes from the US Federal Reserve’s latest meeting showed that policymakers viewed inflation as the biggest risk to the economic outlook, Reuters reported.
“The peso’s latest weakness reflects a combination of persistent dollar strength and rising external price pressures,” Ruben Carlo Asuncion, chief economist at UnionBank of the Philippines, said.
“The US dollar continues to draw support from the Federal Reserve’s higher-for-longer policy stance and elevated Treasury yields, while oil prices above $100 per barrel have raised concerns over inflation and the country’s import bill,” he added.