Wider corruption concerns sink peso to P58 vs. dollar

Manila, Philippines – The peso sank to the P58-per-dollar level on Thursday, Sept. 25, its worst performance in nearly two months, suggesting market jitters over fund misuse in public works.

The local currency weakened to as low as P58.17 against the greenback in midday trade, just as witnesses tagged more high-profile politicians in the corruption scandal in a Senate probe.

The exchange rate closed at a firmer P58.10 per dollar, but weaker by nearly 1 percent, its biggest single-day loss since Aug. 1.

“The country’s corruption issues continued to dampen sentiment,” a trader said.

Thursday marked the third straight day of losses for the local currency. BDO’s research unit noted that investors fear corruption could be worse than earlier thought.

“Sentiment was also weighed down by renewed trade tensions and fresh developments in the Philippine Senate’s corruption probe, where allegations suggested graft extended beyond flood control projects,” BDO said in its research note to investors.

The US dollar was steady on Thursday as traders weighed the prospect of a measured Fed easing cycle following a cautious tone from policymakers while awaiting economic data that may outline the impact of tariffs and the outlook for rates.

Traders have priced in 43 basis points of rate cuts in the remaining two meetings this year although comments from officials including Federal Reserve Chair Jerome Powell indicate that a lot will depend on the upcoming economic data.

The lack of clarity and consensus on future easing has meant traders are no longer fully pricing in a cut next month. The dollar has edged higher since the Fed lowered interest rates last week, as expected.

The dollar index, which measures the US currency against six other units, eased a touch to 97.744, but hovered near its highest level since Sept. 11 it touched overnight.

NewsWatch Plus business news anchor Lois Calderon contributed to this story. – with Reuters