By Joann Santiago
MANILA, March 14 (PNA) — Concerns on China’s growth and the ongoing conflict between Ukraine and Russia made investors choose the United States dollar over other currencies, including the Philippine peso Friday.
This resulted to the weakening of the local unit by P0.10 to P44.65 from Thursday’s P44.55.
BPI lead economist Emilio S. Neri Jr., in a phone interview by the Philippines News Agency, also attributed the local currency’s weakness to the negative close of the local bourse.
The Philippine Stock Exchange index (PSEi) contracted by 0.60 percent or 38.55 points to 6,391.24 points, tracking Wall Street, which was also affected by the China and Ukraine factors.
Thus, from a P44.58 opening Thursday, the peso started Friday’s trade at P44.65. It inched up to P44.64 but later slipped to P44.72.
This brought the day’s average to P44.67, a far cry from the P44.56 a day ago.
Volume of trade reached US$ 812.4 million, higher than the US$ 590.2 million on Thursday.
Next week, the peso is expected to trade between P44.60 and P44.80.
Aside from the China and Ukraine factors, Neri said investors are also on risk-off attitude ahead of the Federal Open Market Committee (FOMC) meeting next week.
He explained that US monetary officials are expected “to emphasize the improving numbers last February,” particularly on the labor market.
The US economy posted a higher-than-expected 175,000 new jobs in the second month of this year, up from the 129,000 last January.
Neri explained that analysts expect the labor market to continue to improve since the weather is not as bad as it was a few months back.
“Unless they would announce something shocking, the market expects the Fed to announce another cut of about US$ 10 billion and higher amount from April onwards once March labor data come out,” he said.
Neri said some analysts now expect US monetary officials to hike key rates in the first quarter of 2015 from earlier projection of the third quarter of next year.
Since December 2008, Federal Reserve’s key rates are at record low of zero to 0.25 percent. (PNA)