Peso opens on 8-year low

ABS-CBN News

Posted at Nov 21 2016 12:08 PM | Updated as of Nov 21 2016 01:23 PM

MANILA - The Philippine peso opened at a fresh eight-year low at P49.82 to the dollar on Monday.

The peso has dropped 5 to 7 percent since September, but Migs Lopez, investment manager at AB Capital said the depreciation is "not an isolated case for the Philippines but a market-based movement" due to the looming US Federal Reserve interest rate hike.

"We're going to see outflows dictating the mood and direction of where the peso is going to trade...the market has been swinging, the volatility is there, and we're seeing the effects on our currency," he told ANC's "Market Edge with Cathy Yang."

Lopez added investors should be "cashed up" as uncertainty persists following the US elections.

The dollar on Friday touched its highest level in 13 ½ years against a basket of major currencies after US Federal Reserve Chairperson Janet Yellen told a congressional hearing that interest rates could be raised “relatively soon.”

A Fed hike could direct funds back to the US from emerging markets like the Philippines, driving dollar demand.

The peso breached the P49 to the dollar level last week following a sell-off in US treasuries as investors reconfigured their portfolios after the shock win of US president-elect Donald Trump.