Philippine Peso Dips to 51.13 Against US Dollar: Time to Restore?

Philippine peso banknotes
Image Credit: File

Manila: The Philippine peso weakened further against the dollar on Thursday (January 13, 2022) amid a sharp rise in local coronavirus infections fueling economic uncertainty and a more hawkish US Fed.

The Philippine currency slipped to 51.13 by 6:30 p.m. Thursday (January 13, 2022, Manila time). It settled at P51.03 at 8.10 UTC – its highest intraday level – before falling further on Thursday.

Health authorities in the Asian country have recorded a 3,663% increase in COVID cases in the past 2 weeks.

Data from Bangko Sentral ng Pilipinas showed the peso-dollar rate at 51.10 on Thursday. Against the UAE dirham, the Philippine peso stood at 13.9139 on Thursday, based on the BSP’s benchmark exchange rate bulletin.

The Asian currency weakened by 49.829 on December 21, 2021 and by 50.88 on January 5, 2022, according to data from xe.com.

Check out the latest UAE money transfer exchange rates here.

Fed hawkish

What underlies the strength of the US dollar is the fact that the Fed is shrinking, reducing its balance sheets and raising rates.

The Asian currency slipped as market participants heeded hawkish statements from the U.S. Fed’s latest policy review minutes released on Wednesday.

The Fed in its December 14-15 policy review said it would accelerate its reduction in asset purchases amid an improving US economy.

U.S. central bank officials also said on Wednesday they expected up to three rate hikes this year.

Investor concerns over rising coronavirus infections have caused the peso to depreciate.

The US dollar performed well in 2021, gaining against almost all currencies. The US dollar index (DXY) gained 6.4%.

Investors expect the strong dollar to continue this year due to the Fed’s monetary tightening.

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