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Peso weakens as market awaits 2021 budget approval

peso weakens as market awaits 2021 budget approval - Peso weakens as market awaits 2021 budget approval

THE PESO weakened against the dollar on Monday as the market waits for developments in the 2021 national budget deliberations and amid stimulus hopes in the United States.

The local unit closed at P48.47 versus the dollar on Monday, down by 16.5 centavos from its P48.305 finish last Friday.

The peso opened Monday’s session at P48.35 against the greenback. It logged an intraday high of P48.33 per dollar but closed at its worst showing for the day.

Dollars traded rose to $600.35 million on Monday from $562.37 million last  Friday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso declined amid anticipation of the continuation of deliberations on the 2021 national budget in Congress.

“The peso was weaker as the markets await the progress on the 2021 national budget with special Congressional sessions scheduled on October 13-16 to ensure the timely passage of the 2021 national budget amid changes in the House Speaker position,” Mr. Ricafort said in a text message.

Meanwhile, a trader said in an e-mail that the peso weakened after US President Donald J. Trump announced he wants a bigger stimulus to boost the world’s largest economy amid the coronavirus pandemic.

The trader said this caused investors to prefer the dollar over the peso.

The Trump administration on Sunday called on the US Congress to pass a stripped-down coronavirus relief bill using leftover funds from an expired small-business loan program, as negotiations on a broader package ran into resistance, Reuters reported.

The administration proposal, which Democrats dismissed as inadequate, was the latest twist in on-again, off-again talks to try to secure more stimulus, as the economy struggles to recover from coronavirus-related shutdowns that threw millions of Americans out of work.

Mr. Trump on Friday offered a $1.8-trillion coronavirus relief package. That came days after he abruptly called off negotiations until after the Nov. 3 election in which he is seeking reelection.

For today, Mr. Ricafort sees the peso moving from P48.40 to P48.55 versus the dollar, while the trader expects it to range from P48.45 to P48.55. — KKTJ with Reuters

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