Peso slips vs dollar as Moody's cuts US sovereign credit rating

THE PESO inched down against the dollar on Monday after Moody’s downgraded the US’ sovereign credit rating.

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The local unit closed at P55.67 per dollar, slipping by 3.5 centavos from its P55.635 finish on Friday, Bankers Association of the Philippines data showed.

The peso opened Monday’s session sharply weaker at P55.80 against the dollar. Its worst showing was at P55.89, while its intraday best was at P55.66 versus the greenback.

Dollars exchanged slid to $1.41 billion on Monday from $2.15 billion on Friday.

"The dollar-peso traded at [a low] of P55.89 on major reactions following the Moody’s downgrade of US’ rating. But [the pair saw some] upside this afternoon, tracking the dollar’s weakness," a trader said in a phone interview.

"The peso depreciated on safe-haven concerns after the US’ sovereign credit rating was downgraded by Moody’s, ultimately stripping the US of its last ‘AAA’ rating," another trader said in an e-mail.

For Tuesday, the first trader expects the peso to move between P55.50 and P55.90 per dollar, while the second trader sees it ranging from P55.50 to P55.75.

The US dollar fell against a range of currencies on Monday, slipping to a 10-day low versus the safe-haven yen as markets digested a surprise downgrade of the US government's credit rating while trade tensions also weighed on sentiment, Reuters reported.