MANILA, Philippines — The peso pierced the 56 to $1 level yesterday, weakening by 32 centavos to close at 56.01 from 55.69 last Monday.
The local currency opened weaker at 55.73, but bounced back to an intraday high of 55.635 before losing steam to hit an intraday low of 56.09.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso weakened for the third straight trading day to hit its lowest level since closing at 56.055 to $1 on Dec. 13.
Trading was heavy as volume surged by 43.7 percent to $2.22 billion from Monday’s $1.54 billion.
Ricafort said the local currency weakened a day after Finance Secretary Benjamin Diokno signaled a possible 100-basis-point cut on interest rates this year.
Ricafort said the Bangko Sentral ng Pilipinas (BSP) would likely match the 75-basis-point cut by the US Federal Reserve.
He also cited the plan of the BSP to limit intervention in the local foreign exchange market amid easing inflation trend that could provide some support for the peso.
Ricafort said immediate major resistance is at 56.10 to 56.30 levels, while immediate major support level is at 55.55 to 55.65:$1 range.