Peso slumps ahead of Fed policy meeting results

The Philippine peso softened against the US dollar on Wednesday, as investors wait for results of the US Federal Reserve policy meeting.

The local currency lost 12 centavos to close at P51.86:$1 Wednesday from P51.74 on Monday.

Philippine financial markets were closed for Labor Day on Tuesday.

“We saw broad dollar strength as the US currency strengthened against major and regional currencies today,” a foreign exchange trader said.

Markets are now waiting for results of the Federal Open Market Committee (FOMC)  policy meeting on May 1 and 2.

The Fed raised the federal fund rate in March, and forecasted at least two more hikes this year.

“Investors are already speculating as much as four US rate hikes this year, higher than the modal forecast of three,” the trader said. —Jon Viktor Cabuenas/VDS, GMA News