The Philippine peso retreated from a four-year high after reports heightened concern the region’s economies are slowing, tempering inflows into stocks.
The currency has weakened 0.8 percent in two days, headed for its worst back-to-back loss in a month, after official data yesterday showed Singapore’s exports and South Korea’s department-store sales fell in August. The Philippines’ unemployment rate rose to 7 percent in July from 6.9 percent in April, the statistics office said in Manila today. Foreign funds have bought $2.2 billion more local shares than they sold this year, exchange data show.
“The peso reflects the economic concerns in the region,” said Emilio Neri, an economist at Bank of the Philippine Islands in Manila. “Investors are turning cautious following hefty stock gains this year.”
The peso dropped 0.3 percent to 41.743 per dollar as of 4 p.m. local time, according to data from Tullett Prebon Plc. The currency touched 41.358 yesterday, the strongest level since April 1, 2008. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 5.25 percent, according to data compiled by Bloomberg.
The Philippine Composite Index snapped a four-day rally today. The gauge has advanced more than 22 percent this year.
Bangko Sentral ng Pilipinas kept its overnight rate at a record-low 3.75 percent on Sept. 13. The central bank raised its average inflation forecast to 3.4 percent for this year and 4.1 percent for 2013, compared with earlier projections of 3.1 percent and 3.2 percent, respectively.
The yield on the 5.875 percent bonds due March 2032 was steady at 5.73 percent, according to Tradition Financial Services. The treasury will auction 9 billion pesos of 20-year notes on Sept. 25, according to its sale calendar.