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The Philippine peso dropped the most in almost a month on speculation companies stepped up dollar purchases to pay for costlier crude-oil imports and inflows from overseas workers slowed. Government bonds rose.
The currency fell for a fourth day, extending a retreat from a four-year high, after oil rebounded 2.7 percent from a four-month low of $84.05 a barrel on Nov. 7. Asian currencies and stocks declined amid speculation U.S. tax increases and spending cuts due next year, the so-called fiscal cliff, will hurt the world’s largest economy, raising the prospect of a global recession.
“There is some corporate demand for dollars, probably because they want to import more before oil prices go higher,” said Mark Baquiran, a currency trader in Manila at Philippine Savings Bank. (PSB) “The dollar’s strength is also due to concern about the U.S. fiscal cliff.”
The peso weakened 0.3 percent to 41.257 per dollar in Manila, according to data from Tullett Prebon Plc. That’s the biggest decline since Oct. 18. It has lost 0.5 percent since reaching 41.05 on Nov. 8, a level last seen in March 2008. One- month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 4.70 percent, according to data compiled by Bloomberg.
Remittances from citizens working abroad rose 5.9 percent in September from a year earlier, the central bank reported today after the market closed. That compared with the median estimate of economists for a 7 percent gain and the 7.6 percent increase in August.
President Barack Obama meets Democratic and Republican leaders in Congress tomorrow to discuss ways to avoid $607 billion in automatic budget reductions and tax additions set to take effect in January. Without a compromise, the world’s largest economy may tip into recession, according to JPMorgan Chase & Co.
The yield on the 8 percent notes due July 2031 dropped three basis points, or 0.03 percentage point, to 5.58 percent, according to Tradition Financial Services. The yield reached a two-month low of 5.57 percent on Nov. 12.
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