Peso sinks ahead of Fed meeting

The Philippine peso softened against the US dollar on Tuesday, as market investors awaited this week's meeting of the US Federal Reserve.

The local currency lost 18 centavos to close at P52.83:$1 from Monday's finish of P52.65:$1.

"Investors are waiting for the US Federal Reserve's message this week knowing that the Fed has been dovish in recent weeks prompting a global equity rally," Ruben Carlo Asuncion, chief economist at the Union Bank of the Philippines, said in an email interview.

The US Federal Open Market Committee (FOMC) is scheduled to meet on March 19 and 20, to discuss whether or not current economic conditions warrant a change in policy.

"With signs of global economic growth slowing, traders were focused on the Federal Reserve, which is kicking off its two-day policy meeting on later in the day, for clues about the likely path of US borrowing costs," Reuters said in a report.

Locally, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) is scheduled to meet on Thursday, March 21.

"[T]he BSP meeting result this week is being anticipated, which is also the new BSP governor's policy meeting," said Asuncion. — BM, GMA News