Peso Sinks to New Low as Rate Hike Bets Fuel Dollar Strength

The Philippine peso hit a new record low against the US dollar on Monday, falling to 62.86 per dollar as expectations for higher interest rates from major central banks boosted the value of the greenback.

The peso weakened by 18 centavos compared to its previous close and even touched an intraday low of 62.875 before recovering slightly.

In a note on Friday, ING Bank said it expects the US Federal Reserve to deliver a 25-basis point rate hike, which could put additional pressure on the peso.

The Bangko Sentral ng Pilipinas (BSP) may also opt for another quarter-point rate hike in the fourth quarter despite weak economic growth, according to ING Bank.