The Pinoy Business Chronicle

Business news and analysis. Covering financial news, economic issues, stock market data, local business, business policy and more.

Finance News

Peso drops further vs dollar on delayed passage of US stimulus

peso drops further vs dollar on delayed passage of us stimulus 816x478 - Peso drops further vs dollar on delayed passage of US stimulus

THE PESO extended its decline versus the dollar on Thursday after the US Treasury said the passage of a stimulus may be delayed further.

The local unit closed at P48.68 versus the dollar on Thursday, declining by three centavos from its P48.65 finish on Wednesday, data from the Bankers Association of the Philippines’ website showed.

The peso opened at P48.58 against the greenback on Thursday. It climbed to an intraday high of P48.56 during the session and hit a low of P48.69 versus the dollar.

The volume of dollars traded rose to $829.01 million on Thursday from $715.61 million on Wednesday.

A trader said the peso sank after the chief of the US Treasury Department doubted the passage of a fresh economic stimulus meant to mitigate the impact of the coronavirus pandemic.

“The local currency weakened after US Treasury Secretary Steven Mnuchin stated that any coronavirus stimulus package is unlikely to pass before the November presidential elections,” the trader said in an e-mail.

Mr. Mnuchin said he and House of Representatives Speaker Nancy Pelosi were “far apart” on another coronavirus economic relief package, and that a deal would be hard to reach before the Nov. 3 elections, but he would keep trying, Reuters reported.

The White House and Democrats and Republicans in Congress are under mounting pressure to hammer out a fiscal stimulus deal to help Americans weather a pandemic that has killed nearly 216,000 people and damaged the economy.

But the two sides are divided over several priorities. Meanwhile, Senate Republicans are resisting as too expensive a $1.8- trillion offer that Mr. Mnuchin proposed last week. Ms. Pelosi says it’s insufficient and is calling for a $2.2-trillion package.

On Tuesday, Senate Majority Leader Mitch McConnell, the top Republican in the US Congress, announced that the Senate would vote next week on a slimmed down $500-billion COVID-19 bill. Democrats blocked a similar proposal last month.

The US Congress passed about $3 trillion in coronavirus aid, including help for the unemployed, in March.

For today, the trader sees the peso moving from P48.60 to P48.80 per dollar, while Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort sees it ranging from P48.60 to P48.75. — KKTJ with Reuters

Leave a Reply

Theme by Anders Norén