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Peso weakens on US stimulus talks

peso weakens on us stimulus talks - Peso weakens on US stimulus talks

THE PESO weakened slightly against the dollar on Thursday as the United States hammers out a deal on fresh stimulus to help boost the world’s largest economy amid the coronavirus pandemic.

The local unit closed at P48.60 versus the dollar on Thursday, declining by 1.5 centavos from its P48.585 finish on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened Thursday’s session at P48.55 per dollar, which was also its intraday best. It weakest showing hit P48.61 against the greenback.

Dollars traded declined to $614.4 million on Thursday from $710.7 million on the previous day.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message that the peso declined after a further delay in a stimulus deal between US House Speaker and opposition member Nancy Pelosi and the White House.

The dollar treaded water against most major currencies on Thursday as US stimulus talks remained the focus for markets, with trading buffeted by the extent of progress made on the potential size of the aid package, Reuters reported.

The dollar index was nearly flat against a basket of currencies at 92.792, having marked its lowest level since Sept. 2 overnight.

On Wednesday, the dollar weakened to a seven-week low after US President Donald Trump and House Speaker Nancy Pelosi boosted hopes an agreement on stimulus was close, sparking demand for riskier assets.

But prospects remain dim for the Republican-controlled Senate to approve any aid before the Nov. 3 election, as Mr. Trump accused Democrats of being unwilling to craft an acceptable compromise on stimulus.

Separately, Federal Reserve Governor Lael Brainard said the biggest risk to her outlook for economic recovery was that fiscal support from the federal government would be withdrawn too soon.

Meanwhile, a trader said in an e-mail that the peso weakened amid market expectations of more claims for unemployment benefits in the US.

For today, Mr. Ricafort expects the peso to range from P48.55 to P48.65 versus the dollar, while the trader sees it moving from P48.50 to P48.70. — KKTJ with Reuters

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