November 21, 2017 | MANILA, PHILIPPINES

Peso extends slump vs dollar

THE PESO extended its slump against the dollar on Thursday, amid market jitters over US Federal Reserve Chair Janet Yellen’s hints of interest rate hikes next month.

The local currency closed at P49.97 versus the greenback on Thursday, five centavos lower from Wednesday’s P49.92-per-dollar finish.

Thursday’s session saw the peso opening the foreign exchange market at a stronger level of P49.89 against the dollar, while its worst showing for the day reached as low as P49.85. Its peak for the day was at P49.88-to-the-dollar.

Dollars traded on Thursday climbed to $376.5 million from the $319.5 million that changed hands during the previous session.

Traders said in separate phone interviews attributed the peso’s continued decline against the dollar to the market’s cautious stance ahead of the Fed’s Federal Open Market Committee (FOMC) meeting in March.

Reuters reported that Ms. Yellen, in her second day of economic testimony before Congress, offered no additional insight on the timing of the central bank’s next rate hike after her comments a day earlier had hinted at a fairly hawkish policy stance.

On Tuesday, Ms. Yellen hinted more rate increases were on the way as the jobs market has improved and inflation has shown signs of nearing the Fed’s 2% goal, Reuters said.

“The dollar traded higher against the peso after markets are now anticipating a higher probability of rate hikes happening in March,” a trader said.

“According to market analysts, markets are now pricing in a 44% chance of the Fed increasing rates next month from the previous 30%,” the trader added. “So because of that, we saw a lot of buying interest for the dollar, almost testing the critical P50 figure resistance.”

For Friday, one said the P49.85 to P50-to-a-dollar range will hold until March or “until we get confirmation whether or not the FOMC will push through with their rate hike.” The other trader said that the pair may move within P49.90 to P50 range. -- J.M.D. Soliman