The Philippine peso weakened beyond 43 per dollar for the first time in a year after exports dropped more than economists forecast and unemployment rose. Bonds fell.
The peso has lost 2 percent since June 7, set for the biggest two-day drop since August 2007. Standard & Poor’s raised its outlook for the U.S.’s AA+ debt rating to stable yesterday, adding to speculation the Federal Reserve will cut its monthly bond purchases. Shipments from the Philippines slid 12.8 percent in April, official figures showed today, compared with a 5.3 percent estimate in a Bloomberg survey. The jobless rate rose to 7.5 percent in April, the highest in three years.
“Exports have been wallowing, in line with what we’ve seen in other Asian economies,” said Joey Cuyegkeng, an economist at ING Groep NV in Singapore. “That adds to the weakness in Asian currencies including the peso. The S&P outlook upgrade for the U.S. allows monetary policy some leeway.”
The peso declined 0.7 percent to 43.10 per dollar as of 10:29 a.m. in Manila, according to prices from Tullett Prebon Plc. The currency touched 43.23 earlier, the lowest level since June 8, 2012. It has has weakened 4.7 percent this year.
One-month implied volatility, a measure of expected moves in the exchange rate used to price options, increased 26 basis points, or 0.26 percentage point, to 8.1 percent, the highest level since June 2012.
The yield on the 6.125 percent government bonds due November 2037 climbed 10 basis points to 5 percent, according to prices from Tradition Financial Services. That matches a June 7 level that was the highest since Feb. 11.
To contact the reporter on this story: Lilian Karunungan in Singapore at firstname.lastname@example.org