More weakness in store
for Philippine peso
SINGAPORE — The Philippine peso is likely to weaken further, probably hitting 45 and even 46 to the US dollar by the end of this year, technical analysts said.
The peso hit a six-month low at 43.48 per dollar on Thursday, taking its loss so far this year to 4.8 percent, the worst preformer in Asia after the South Korean won and the Indian rupee.
“I think the dollar could still go up versus the peso, the 43.5-44 area will be the near-term resistance for the dollar,” said Pak Lai Ng, technical analyst at Forecast.
“Once the 43.5-44 area is cleared, we could see the dollar go higher, probably to 45.5-46 in 3-6 months,” he said.
The spot peso has fallen below the 200-day moving average in recent sessions, indicating further weakness ahead, he said.
P.A. Rajan, technical analyst at IDEAglobal, said he expected the peso to ease to 44.5 per dollar in 1-2 months.
“It has potential to reach 45.375, probably in three months, but we have to follow it closely,” he said.
The 45.375 level was a 38.2 Fibonacci retracement of the peso’s steep rise versus the dollar from June 2006 to February 2008, he said.
The peso was the top performer in Asia last year, when it gained 19 percent, but its fortune has reversed this year due to worries over inflation and a widening trade deficit.
Earlier this week, analysts at Standard Chartered Bank cut their forecast on the peso, expecting it to ease to 44.50 by the end of September and to 44.75 by the end of 2008 instead of 43.25 and 43.75 in their earlier outlook, respectively.
“Going forward, we expect further peso weakness on slowing growth and further deterioration in international and external balances,” the analysts said in a note.
But some analysts are bullish about the peso in the longer term.
McNeil Curry, technical strategist at Barclays Capital, agreed that the peso would head lower in the near term, probably to 44.5, but he expected it to bounce back later this year.
“The dollar/peso continues to correct higher from its March lows, but ultimately this is a counter trend and a temporary correction,” he said.
NEW YORK (Reuters) – Oil prices surged nearly $5 to a record near $134 a barrel on Wednesday after a U.S. government report showed a surprise drop in crude stockpiles, reinvigorating fears of a worsening supply crunch.
Weakness in the U.S. dollar added to oil’s gains by increasing the purchasing power of buyers holding other currencies, dealers said.
The gains bring oil up more than 33 percent so far this year in a rally that has raised alarm bells in consumer countries like the United States, already hard-hit by a housing slump and credit crisis….