THE PESO depreciated to a two-month low against the dollar on Wednesday after the country’s trade deficit widened in November.
The local unit closed at PHP 56.275 per dollar on Wednesday, weakening by 26.5 centavos from its PHP 56.01 finish on Tuesday, based on Bankers Association of the Philippines data.
This was the peso’s worst close in more than two months or since its PHP 56.73-per-dollar close on Oct. 31, 2023.
The peso opened Wednesday’s session at PHP 56.15 against the dollar, which was also its intraday best. Its weakest showing was at PHP 56.41 versus the greenback.
Dollars exchanged rose to USD 2.55 billion on Wednesday from USD 2.22 billion on Tuesday.
The peso declined against the dollar after the Philippines’ trade deficit widened in November, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The peso weakened significantly after the decline in the country’s trade balance in November,” a trader likewise said in a text message.
The Philippines’ trade-in-goods deficit widened by 26.3% to USD 4.69 billion in November from the USD 3.72-billion gap a year prior. It was also wider than the revised USD 4.39-billion deficit in October.
This marks the widest trade deficit in seven months or since the USD 4.84 billion in April.
In the 11 months through November, the trade deficit reached USD 48.98 billion, 8.8% narrower than the USD 53.72-billion gap in the same period in 2022.
The peso was also dragged down by higher global crude oil prices recently, Mr. Ricafort said.
For Thursday, the trader said the peso could recover against the dollar ahead of potentially softer US consumer inflation.
The trader sees the peso moving between PHP 56.05 and PHP 56.30 per dollar on Thursday, while Mr. Ricafort sees it ranging from PHP 56.20 to PHP 56.40. — AMCS