Peso hits 8-year low at 47.16:$1

MANILA, Philippines - The peso shed yesterday 22.5 centavos and pierced the 47 to $1 level, hitting its weakest level since October 2009 after the US released a strong jobs report that could pave the way for the much anticipated interest rate lift-off in December.

The peso closed at 47.16 to $1 from Friday’s 46.935 to $1. This was the weakest level since the peso closed at 47.195 to $1 last Oct. 22, 2009.

The peso opened at 47.1 to $1 and hit an intra-day low of 47.21 to $1. Volume amounted to $720.4 million from Friday’s $590.8 million.

Bank of the Philippine Islands research officer Nicholas Antonio Mapa said the strong US payrolls report raised the chances the impending normalization of interest rates by the US Federal Reserve would happen in December.

“Very strong payrolls number last Friday and thus the chances for a December Fed hike is pushed up to 68 percent from 50 percent,” Mapa said

He pointed out the local currency could further weaken against the greenback.

 “Possibly will stay elevated but weak data or comments from a Fed official, or even profit taking can cause market to sell off and correct but trend looks for a stronger dollar as expectations for a hike grow,” he added.