Peso plunges at ₱54.31 vs $1, stock market in the red

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Metro Manila (CNN Philippines, September 25) — And the local currency continued to fall.

The peso spot trade closed at ₱54.31 versus the dollar today, eight centavos weaker from yesterday's close of ₱54.23.

"The depreciation of the peso can be attributed to safe-haven buying amid escalating U.S.-China trade tension. The new round of tariff imposition dampened investors' risk appetite," said Land Bank market economist Guian Dumalagan.

He added the peso could trade between ₱54.20 and ₱54.40 on Wednesday.

The blood bath in the stock market continues. Traders are apprehensive of upcoming economic data while the Philippine Stock Exchange tracked regional markets.

The market fell by 1.37 percent, or by 101.4 points today, closing at 7,332.17 as it fell past the 7,400 threshold range once more.  All sub-indices were in the red.

"Philippines shares fell along with regional markets as global trade concerns and political dysfunction tested investor optimism," said Luis Limlingan of Regina Capital.

On the local front, Gio Perez of Papa Securities said traders are on a wait-and-see mode on the upcoming meeting of the Bangko Sentral ng Pilipinas (BSP) for another possible interest rate hike.

"Participants could still be on a wait-and-see mode for the BSP's decision in the upcoming Monetary Policy meeting this Thursday, September 27. Consensus widely expects a 50bps raise," Perez said.

The interest rate hike could keep the peso in check, Limlingan added.

"Depends on BSP outcome, if 50bps then I think it may keep to ₱54.50, but anything lower it might be worse," Limlingan said.

The U.S. Fed is also expected to hike interest rates in September 27.