ABS-CBN News

Philippine peso hits over 3-year low

Posted at | Updated as of 01/22/14 5:50 PM

SINGAPORE – The Philippine peso fell to a more than three-year low on Tuesday as investors continued to bet on further reductions in the U.S. Federal Reserve's stimulus, while the Thai baht rose on short-covering.

The peso lost as much as 0.3 percent to 45.25 per dollar, its weakest since September 2010, as offshore funds sold the currency and on its weakness in the non-deliverable forwards markets.

The peso has been the worst performing Asian currency so far this year as worries about a pick-up in inflation prompt investors to sell local bonds.

The Singapore dollar eased 0.2 percent to 1.2796 to the U.S. dollar, its weakest since Sept. 6.

Overall, most emerging Asian currencies were boxed in a tight range as demand for dollars is expected to increase further on views the Fed will continue to taper its bond-buying program.

A story in the Wall Street Journal that the Fed could announce a further reduction to its monthly bond purchases at the end of its Jan. 28-29 policy meeting, to $65 billion from the current $75 billion, kept dollar bulls in play.

The baht, however, advanced as investors cut bearish bets after a relatively peaceful 48 hours following a weekend of violence in Bangkok where protesters have been trying for more than two months to bring down the government.

A majority of analysts polled by Reuters expect the central bank will cut its benchmark interest rate on Wednesday for the second meeting in a row as the prolonged political strife takes a growing toll on the economy.