Peso weakens on Omicron fears, Fed meet
THE PESO retreated versus the dollar on Tuesday amid fears caused by the Omicron variant and cautious sentiment ahead of the US Federal Reserve’s policy review.
The local unit closed at P50.35 per dollar on Tuesday, down by three centavos from its P50.32 finish on Monday, based on data from the Bankers Association of the Philippines.
The peso opened Tuesday’s session weaker at P50.37 versus the dollar. Its worst showing was at P50.38, while its intraday best was at P50.33 against the greenback.
Dollars exchanged declined to $651.7 million on Tuesday from $658.1 million on Monday.
A trader in an e-mail said the peso weakened due to heightened concerns due to a death caused by the Omicron variant of the coronavirus disease 2019 (COVID-19).
UK Prime Minister Boris Johnson on Monday said at least one patient who was infected with the latest detected variant died, according to Reuters.
“So I think the idea that this is somehow a milder version of the virus — I think that’s something we need to set on one side — and just recognize the sheer pace at which it accelerates through the population,” Mr. Johnson told reporters.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that investors were cautious ahead of the Federal Open Market Committee’s (FOMC) policy review.
After the FOMC’s meeting from Tuesday to Wednesday, Fed Chairman Jerome H. Powell is expected to announce the central bank’s direction on is tapering in asset purchases and eventual interest rate hikes.
The market is also anticipating the Fed’s view on inflation, employment, and the economic recovery.
For Wednesday, Mr. Ricafort gave a forecast range of P50.28 to P50.43, while the trader expects the local unit to move within P50.25 to P50.50 versus the dollar. — L.W.T. Noble with Reuters
