THE PESO declined to a four-month low against the dollar on Wednesday as Donald J. Trump claimed victory in the US presidential election.
The local unit closed at P58.661 per dollar on Wednesday, weakening by 34.6 centavos from its P58.315 finish on Tuesday, Bankers Association of the Philippines data showed.
This was the peso’s lowest close in more than four months or since its P58.725 per dollar finish on July 3.
The peso opened Wednesday’s session weaker at P58.50 against the dollar, which was already its intraday best. Its worst showing was at P58.77 versus the greenback.
Dollars exchanged jumped to $1.91 billion on Wednesday from $1.15 billion on Tuesday.
“The dollar-peso ended higher because of the election with Trump leading,” a trader said by phone.
“The peso weakened after the US presidential election results pointed toward a second Trump term,” another trader said in an e-mail.
Markets have already priced in a possible victory by Mr. Trump, which led to a generally stronger dollar and higher US Treasury yields, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort likewise said in a Viber message.
Investors bought dollars, bitcoin and stocks, and sold bonds as Mr. Trump claimed victory in the US presidential election and Republicans took control of at least one chamber of Congress, Reuters reported.
US stock futures hit record highs, the dollar surged and Treasury yields jumped, while bitcoin broke $75,000 for the first time — all moves flagged by investors as likely should Trump win over Democrat Kamala Harris.
The results so far underscore how one of the most unusual presidential elections in modern US history could have far-reaching implications for tax and trade policy as well as US institutions.
The results affect assets globally and will determine the outlook for US debt, the strength of the dollar, and a host of industries that make up the backbone of corporate America.
Leading into Tuesday, polls showed a dead heat between the former president and the current vice president. But by 2 a.m. ET, Mr. Trump had won the swing states of North Carolina and Georgia and was leading in several others, according to Edison Research.
Fox News projected he had won the presidency.
Republicans also won control of the US Senate, ensuring they will dominate at least one chamber of Congress next year.
Assets whose prices could be helped by Mr. Trump’s pledges to raise tariffs, cut taxes and slash regulations shone, while dealers said cash was flowing out of emerging markets and US Treasury bonds tanked in anticipation of a ballooning deficit.
For Thursday, the first trader said the peso may continue to weaken as markets continue to react to the election results and with the US Federal Reserve set to announce its policy decision overnight. The second trader added that potentially slower Philippine gross domestic product (GDP) growth in the third quarter could weigh on the peso. The government will release GDP data on Thursday (Nov. 7).
The first trader sees the peso moving between P58.50 to P59 per dollar, while the second trader expects it to range from P56.55 to P56.80. Mr. Ricafort forecasts the peso to trade between P58.55 and P58.75. — AMCS with Reuters