The local currency flirted with the P48-to-a-dollar level on Tuesday as market participants deal with volatilities driven by oil now 20 percent lower and likely to fall even lower to $25 a barrel down the line.
Data from the PDS Group show the local currency trading sharply lower on Tuesday at P47.98 from P47.75 per dollar, testing the resistance at the day’s low of P48. The peso was strongest at P47.95 per dollar during the day.
It would end the day half a centavo short of P48 at P47.995 per dollar at the PDS. This was an 11.5-centavo depreciation from previous day’s trade.
Total transaction volume stood at $596.7 million, lower than the P644.5 million total traded on Monday.
Bank of the Philippine Islands Research Officer Nicholas Antonio Mapa said Asian currencies, including the peso, no longer take the cue from the China yuan fixing but more on the direction of oil prices.
“With oil reversing into losses overnight, risk off sentiment greeted Tuesday’s trading. Equities and currencies in the region all down, with the peso and the PSEi [Philippine Stock Exchange index] not spared,” Mapa said.
Going forward, the analyst said oil volatility should remain dictating movements in financial markets over the near-term.
“Unless we see any substantial change in oil, we may be in these rough waters for a while,” Mapa said.