Peso Slides to New Lows as Oil Prices Soar and Rate Hike Expectations Rise
The peso is expected to slide further against the dollar this week as global oil prices continue to rise due to the ongoing conflict in the Middle East. The local currency hit a new all-time low of P62.68 on Friday, surpassing its previous record of P62.625 set on September 8.
According to Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion, the peso weakened further as market participants positioned ahead of the US August inflation report, which could shape expectations for next week's Federal Reserve policy decision.
The US dollar index held near its highest levels of the past week after conflict in the Middle East pushed up oil prices and bond yields. The benchmark 10-year US Treasury yield neared the closely watched 5% level as investors worried about high government debt levels.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort expects the peso to move between P62.30 and P62.80 against the dollar this week, while a trader sees it ranging from P62.50 to P62.90.