RP peso skids back to P47.07 to US$1

MANILA, Philippines - The peso slid back to the P47-per-dollar level Wednesday, snapping four consecutive days of gains after it tracked the movement of US equities that fell on doubts over a proposed bailout plan for troubled banks. The peso closed Wednesday at P47.07 per dollar, twenty-eight centavos weaker than Tuesday’s P46.79 finish. Volume of transacted dollars improved to $915.5 million from $914.6 million on Tuesday. It opened at the day’s high of P46.90 and reached a low of P47.23 before it settled at the day’s close after it reacted negatively to the decline of US equities on Tuesday night. The Dow Jones industrial average plunged by 4.6% — its biggest single-day drop since Dec. 1 — due to concerns on the viability of the $2-trillion bank rescue package. "The peso fell in reaction to the movement of US equities. Markets were disappointed over the proposed bailout plan. There was a sell-off of US equities," a currency trader said. "It reacted to uncertainties in the global markets. US stocks posted losses on Tuesday night," said a bank treasury official who asked not to be named. However, the trader said the depreciation of the peso was subdued given the low demand for dollars. "There was no demand for dollars. The movement of the peso was dictated by the movements in the global markets," he said, adding that the peso traded between the P47-P47.07 range within the day. Dollar inflows from the first tranche of the bond sale of San Miguel Brewery, Inc., if there were any, were minimal and was already priced in by the local market players as the sale was suspected to have started as early as last week, the trader said. The peso was expected to trade in a tight range of P47-P47.25 today, still due to lack of corporate demand for dollars. — Gerard S. dela Peña, BusinessWorld