Peso weakens to 7-year low

MANILA, Philippines - The peso shed 10.5 centavos as investors await the result of the US elections pitting Democratic candidate Hillary Clinton against Republican Donald Trump this week.

The peso closed at a new seven-year low of 48.585 from Friday’s 48.48 to $1. This was the weakest since the peso closed at 48.62 to $1 on Sept. 4, 2009.

The local currency opened weaker at 48.50 before hitting an intra-day low of 48.59 to $1. Trading volume amounted to $228.15 million, lower than the $398 million recorded last Friday.

In its weekly review, BPI Asset Management said investors are expected to stay on the sidelines ahead of the US presidential election and as markets expect more clarity on the direction of the decision of United Kingdom to leave the European Union (Brexit).

Likewise, it added the peso remained challenged with the impending interest rate hike by the US Federal Reserve toward the end of the year.

“The local currency remained stressed by elevated risk premium, persistent foreign fund outflow and probable December Fed rate hike,” it said.

For his part, Bank of the Philippine Islands research officer Nicolas Antonio Mapa said investors are awaiting the result of the US presidential elections.

“This is (US) election-related, and everybody is unsure on who will win the US presidential election,” he said.

A trader from Metropolitan Bank & Trust Co. said the peso is seen testing the 49 to $1 level.

“The peso’s weakness has gone through lengths not seen since 2009, with the Philippines’ negative publicity being linked as one of the causes. The 48.500 resistance level held last week, but it seems that peso is poised to test 49 barring any major reversal,” the trader said.