Peso nears 53-to-the-dollar mark

The peso nearly breached yesterday the dreaded 53-to- the-dollar barrier, closing at a new 14-month low of 52.90 as external concerns led by the looming US-Iraq war, new terror attacks and negative internal developments such as the budget deficit caused investors to continue hedging in favor of the greenback.

At the Philippine Dealing System (PDS), the peso hit a low of 52.90 and a high of 52.770 to the dollar before closing 17.50 centavos lower yesterday at 52.90 from Friday’s close of 52.725 to a dollar.

Total volume traded amounted to $114 million, or $800,000 lower than Friday’s volume of $114.8 million.

"The weakening of the peso reflected the weakening of regional currencies, which in turn were reacting to the bombing of the French tanker, uncertainties in the Middle East and its potential impact on global oil prices," Deputy Governor Amando Tetango Jr. said yesterday.

"We also saw some short covering by banks which contributed to the increased demand for the dollar," he added.

Earlier, Tetango said the weakness of the peso against the dollar was only temporary as the expected dollar inflow from overseas Filipino workers (OFWS) during the holiday season is expected to boost the local currency.

Dollar remittances from OFWs are expected to reach $8 billion this year compared to last year’s $6 billion.