MANILA, Philippines – First Metro Investment Corp. (FMIC) and the University of Asia said in a report that they expect the Philippine peso to weaken in the first quarter of 2015; reaching P45 to the United States dollar, as the US economy gains momentum.
“The stronger US economy should boost capital flows into the US and keep the US dollar stronger against the euro, yen and other currencies. The peso will not be able to resist the strong tide,” the report said.
“The US dollar further strengthened against most of its counterparts as the Fed (US Federal Reserve) moves towards having an interest-rate hike by second half 2015. Upbeat growth in the US underpinned by recovering demand and production contributed to the USD’s (US dollar) appreciation,” the report added.
The report forecasts that the value of the peso will average at 45.19:$1 in January and at 45.16:$1 in February; compared to November 2014’s average of 44.95:$1.
“The peso-dollar rate is seen to be still on a weakening mode, both in the short and in the long-run. Analysts surmise that the BSP has been intervening all these months to prevent the peso from breaking definitively at the 45:$1 psychological barrier it probably has set for itself. But this may change with the onset of 2015,” the report noted.