Philippine Peso Falls Before Chinese Holidays; Bonds Advance
The Philippine peso declined for a third day on speculation overseas investors are reducing their holdings of the nation’s stocks before next week’s Chinese New Year holidays. The government’s 25-year bonds gained.
Financial markets in Hong Kong will be closed for the first three days of next week and those in Singapore and Malaysia will be shut Feb. 11 and 12, although Philippine markets are open all week. The local benchmark share index dropped by the most in two weeks yesterday.
“This is largely being driven by the coming Chinese New Year holidays,” said Joey Cuyegkeng, an economist at ING Groep NV in Manila. “Offshore players will close out their positions.”
The peso dropped 0.2 percent to 40.722 per dollar as of 10:12 a.m. in Manila, the weakest level since Feb. 1, according to prices from Tullett Prebon Plc. The currency reached 40.550 on Jan. 14, the strongest since March 2008, and has gained 0.8 percent this year. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, was little changed at 4.25 percent.
The yield on the 6.125 percent bonds due October 2037 fell four basis points, or 0.04 percentage point, to 5.09 percent, according to prices from Tradition Financial Services.
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