Peso remained on weakness path

The peso continued to weaken to finish at 56.225 yesterday after opening at P56.15.

“The stronger dollar against major global currencies recently after the Fed’s yearly Jackson Hole symposium signaled higher Fed rates for longer, more hawkish signals from other US Federal Reserve officials recently,” Rizal Commercial Banking Corp. chief economist Michael Ricafort told Daily Tribune.

Ricafort said the peso was affected by the correction in global crude oil prices that rose to one-month highs lately.

Fare hike petitions also pose a threat since higher transport costs is a major driver of inflation. Being proposed is an increase in minimum jeepney fares to P15 from the current P11. There is also a proposal for an increase in taxi flag-down rates to P60 from the current P40.

Fed not displeased

Global investment bank ING said “it seems the Fed is not particularly displeased with the market reaction to Friday’s hawkish Jackson Hole speech from Fed Chair, Jay Powell”.

“Real US yields have moved higher, equities have fallen and the dollar has strengthened. Weaker consumer sentiment is unlikely to blow the Fed off course. Elsewhere, look out for a policy meeting in Hungary today,” ING added.

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