Peso continues losing streak vs. dollar on weak manufacturing data

The Philippine peso closed slightly weaker against the US dollar on Tuesday, taking in the contraction reported in the local manufacturing sector in October.

The local currency lost a centavo to close at P48.41:$1 versus last Friday's finish of P48.4:$1. There was no trading on Monday, a special non-working holiday.

Earlier in the session, results of the monthly survey of IHS Markit showed that the Philippine Purchasing Managers' Index fell to 48.5 in October, below the 50.0 neutral mark that separates expansion from contraction.

"The peso exchange rate closed slightly weaker vs. the US dollar for the third straight day...after softer Philippine manufacturing data (IHS Markit PMI) back to contraction mode," Michael Ricafort, chief economist at Rizal Commercial Banking Corporation (RCBC), said in a mobile message.

The latest reading compares with the seven-month high 50.1 recorded in September, and 52.1 in October 2019.

Ricafort likewise noted that the gauge of the US dollar versus major global currencies was among one-month highs, ahead of the US presidential elections, and the new record high COVID-19 cases in the United States and many European countries.

"Peso also slightly weaker as storm damage recently could cause some uptick in food/agricultural prices and overall inflation, albeit temporary/transitory," he said.

Sustained net foreign selling at the local equities market also factored in on Tuesday's session at $23.57 million following last Friday's $24.76 million. — BM, GMA News