MANILA – The peso weakened on Wednesday, hovering at 10-year lows, as the dollar strengthened and major world markets declined ahead of US President Donald Trump’s policy speech.
The peso opened at P50.32 against the dollar from P50.21 on Tuesday. The Philippine Stock Exchange Index was down 0.66 percent to 7,164.79.
Trump will address Congress on Wednesday, where he is expected to detail his plan to spur growth in the US economy. His policies, analysts said, are likely to stoke inflation, boosting the dollar and putting pressure on central banks around the world to raise interest rates.
The peso could weaken to P51 to P52 against the dollar by the end of the year, BPI Securities analyst Riche Lim told ANC’s “Market Edge with Cathy Yang.”
“It’s a structural weakening of the peso,” Lim said.
Aside from external pressures, Lim said increased imports as the government moves to rebuild the country’s infrastructure could weaken the peso further.
“All in all, we are expecting a further weakening of the peso from the current levels we see today,” he said.