Peso down ahead of decision on quarantine measures

THE PESO depreciated versus the greenback on Monday ahead of the government’s decision on lockdown measures for the rest of the month.

The local unit ended at P47.89 per dollar on Monday, sinking by 19 centavos from its P47.70 close on Friday, data from the Bankers Association of the Philippines showed.

The peso opened Monday’s session at P47.75 per dollar. Its weakest showing was at P47.905 while its intraday best was at P47.74 against the greenback.

Dollars traded hit $1.001 billion yesterday, climbing from the $684.79 million seen on Friday.

The peso weakened against the dollar ahead of Malacañang’s announcement of quarantine measures for the rest of June, which was scheduled to happen after the market’s close.

“The peso was weaker ahead of the possible easing of the quarantine classification alongside with additional measures to reopen the economy that could lead to faster recovery for imports as well,” Mr. Ricafort said in a text message.

President Rodrigo R. Duterte was scheduled to address the nation on Monday night and was expected to announce quarantine measures for the country for the rest of the month. Metro Manila and its adjacent provinces are under general community quarantine with heightened restrictions until June 15.

Meanwhile, a trader attributed the local unit’s depreciation to safe-haven demand for the dollar following news on the proposed infrastructure spending plan in the United States.

“The peso depreciated after a bipartisan group in the US Senate reportedly agreed to a consensus concerning the US infrastructure spending bill,” the trader said in an email.

Reuters reported that a bipartisan group of 10 Senate moderates reached a deal for a five-year infrastructure plan that would cost $974 billion, including new spending worth $579 billion. This deal is smaller than the $1.7-trillion proposal of US President Joseph R. Biden.

For today, Mr. Ricafort gave a forecast range of P47.80 to P47.95 per dollar, while the trader expects the local unit to move within the P47.80 to P48. — LWTN with Reuters

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