THE PESO sank further against the dollar on Wednesday, inching close to its record low, on expectations of faster US consumer inflation and amid fresh hostilities in the Middle East.
The currency shed seven centavos to end at P62.87 versus the greenback from its P62.80 finish on Tuesday, Bankers Association of the Philippines data showed.
The local unit opened the session stronger at P62.70 per dollar and climbed to an intraday high of P62.65. Meanwhile, its weakest showing was at P62.88, near its all-time-low finish of P62.90 recorded on Oct. 8.
Dollars traded declined to $941 million from $1.022 billion.
“The dollar-peso traded higher on expectations of a higher US inflation release tonight,” a trader said by phone.
The peso was also dragged by rising global crude oil prices following renewed tensions in the Strait of Hormuz, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Thursday, the trader said the peso could test the P63 level if the US consumer price index (CPI) comes out higher than market expectations, likely ranging from P62.65 to P63, while Mr. Ricafort expects it to move between P62.75 and P62.95.
The dollar index, which measures the greenback against a basket of currencies, fell 0.09% to 102.09, following a 0.35% slide on Tuesday, Reuters reported.
Attention now focuses on the release of US consumer price index data as well as speeches from Federal Reserve policymakers that could clarify the outlook for interest rates. The US Labor department is due to release its CPI for September, which is expected to have risen 0.6% month-on-month after increasing 0.4% in August, while annual inflation is seen accelerating to 3.6% from 3.4%. Additionally, the Fed is due to publish its Beige Book.
Meanwhile, oil prices rose following attacks on two vessels in the Strait of Hormuz and after Iranian officials told Reuters they were deploying new tactics to target ships, raising the risk of fresh disruption to energy supplies.
Brent crude futures, which are around their highest in nearly two weeks, were last up nearly 1% on the day at $106.5 a barrel. — Aaron Michael C. Sy with Reuters