Philippine Peso Weakens Against US Dollar Amid Fed Rate Hike, Local Factors

The Philippine peso softened against the US dollar after three straight trading days of appreciation, as the greenback was buoyed by the Federal Reserve’s decision to hike rates. The local currency shed 1.9 centavos to close Friday at P62.749:$1 from Thursday’s finish of P62.73:$1. Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the US dollar gained from the Federal Reserve’s first rate hike in three years. “The latest +0.25 Fed rate hike and still elevated US Treasury yields, mostly still among 19-year highs or since 2007, increased the attractiveness of the US currency with higher US dollar-denominated income,” he said in a mobile message. Ricafort also cited the decline in the Philippine Stock Exchange index (PSEi), which fell by 102.73 points, or 1.72%, to 5,855.91. The broader All Shares index fell by 40.31 points or 1.21% to 3,277.80. “Market sentiment remained cautious amid expectations of a significant increase in domestic gas prices next week,” Regina Capital Development Corp. head of sales Luis Limlingan said in a separate mobile message. “Investors continued to monitor the potential impact of higher energy costs on operating expenses and broader market sentiment,” he added. Oil industry sources expect gasoline prices to rise by P4.50 to P5.00 per liter and diesel by P10.00 to P10.50 per liter next week. Nearly all sectoral indices closed in the red — financials down 0.53%, industrial by 0.56%, holding firms by 2.45%, property by 1.55%, and services by 2.53%. Only the mining and oil index grew, up 1.65%. More than 1.617 billion shares, valued at P16.201 billion, changed hands. Decliners led advancers, 96 to 70, while 34 issues were unchanged. —LDF, GMA News