Peso weakens past P57 after Fed signals more cuts later this year

THE PESO slipped back to the P57-a-dollar level on Thursday after the US Federal Reserve delivered a widely expected rate cut, and hinted at more easing later this year.

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It closed at P57.06 against the greenback, down 17 centavos from P56.89 on Wednesday, according to Bankers Association of the Philippines data posted on its website. It opened at P56.97, its strongest for the day, before hitting an intraday low of P57.10.

Dollar turnover rose to $1.55 billion from $1.49 billion on Wednesday.

“The dollar-peso closed higher as the market responded to a less dovish stance from the US Federal Reserve after the rate cut announcement overnight,” a trader said by telephone.

The US central bank trimmed its policy rate by 25 basis points (bps) to 4% to 4.25%, its first reduction since December. Fed Chairman Jerome H, Powell said the Federal Open Market Committee could cut again in October and December, citing slowing job creation and labor market fragility.

“You see minority unemployment going up,” he said. “You see younger people more susceptible to economic cycles,” he added, noting that the pace of hiring had fallen below the level needed to keep the jobless rate steady.