Philippines: Peso crosses 40 mark

This is from Malaya.
This shows the world-wide weakening of the US dollar as much as the strengthening of the peso. Many Filipinos work outside the Philippines and are paid in US dollars. The continuing slide in the US dollar means that their remittances are worth less when converted to pesos.

Peso crosses 40 mark
against US dollar
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The peso yesterday briefly crossed the 40 mark to the US dollar, level last seen in March, 2000.

The further strengthening of the peso was traced to the expected rate cut by the US Federal Reserve.

Traders said the central bank may have stepped in to curb the local currency’s rise, resulting in the peso’s staying at the 41 level although with the dollar further weakening, the peso is set to test eight-year highs "eventually."

At the Philippine Dealing System, the peso opened at 41.05, and then hit an intra-day high of 40.99. The local unit then finished the session at 41 flat, up from 41.01 Friday, a fresh seven-and-ten-month high.

Total turnover amounted to $428.5 million from $629.2 million.

Traders said the peso is seen breaching the 40 levels, testing probably the 40.70-40.90 levels in the proceeding sessions.

"Remittances remain strong. The prospect of the Fed lowering its key rate anew is seen further slowing the dollar," one trader said.

Traders said the central bank was spotted in the market, tempering the peso’s gains. With limited capacity to intervene, however, traders said the peso would "eventually" rise to the 40 levels.

Scarce demand, traders said, was adding to the peso’s strength.

Jonas Ravelas, market strategist of Banco de Oro Universal Bank, said; "only a break of 41.30 resistance levels suggests near-term reversal towards 41.50-41.75."