Peso Sept 28
Image Credit: Gulf News

Manila: Will the Philippine peso hit the all-time-low of Php60 against the US dollar?

It's a possibility that's now literally a hair's breadth away as the Philippine currency continues to tread on troubled waters alongside its Asian peers. Early on Wednesday morning, as the US dollar continued to surge on the back of an overly active Federal Reserve, as the peso dropped past Php59 versus the US currency.

That makes the Asian currency 1-peso shy of the Php60: $1 resistance mark. The peso's performance against the dollar stood at Php59 as of 12 noon September 28, 2022, thus hitting a new low.

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On Wednesday trading on the peso opened at Php58.95. The market closes at 4:00 PM. Due to US Federal Reserve's huge policy rate hikes to control stubbornly high inflation, the dollar has been on the upswing to its best level in decades, reflecting action in other currency markets in the area.

The safe-haven greenback has been a major beneficiary from the rout in sterling, rising to a fresh 20-year peak of 114.520 against a basket of currencies.

Elsewhere in Asia, the dollar edged back up to 144.64 yen (as of 8:58 AM UAE, 4:58 AM UTC), testing the resolve of the Japanese authorities to protect the 145.00 level after the recent intervention with a major policy rate hike.

The dollar also touched a record high on the Chinese yuan at 7.22 Wednesday, having risen from 6.87 vs $1 a month ago, on August 28, 2020.

The mounting pressure on emerging market currencies from the dollar’s rise is in turn adding to risks that those countries will have to further lift interest rates and undermine growth.

Gold rates, too, had been depressed alongside the ascent of the dollar and bond yields.