The Philippine peso headed for its first weekly loss in a month, as exports fell more-than-expected and events in China and Greece deterred risk-taking.
Shipments dropped 17.4 percent in May from a year earlier, the biggest decline since 2011, data showed on Friday, after a report earlier in the week showed inflation eased in June. A gauge of dollar strength rose for a third week after Greece’s rejection of more austerity increased the chance of a euro exit and Chinese authorities scrambled to stem a stocks rout.
The peso weakened 0.3 percent since July 3 to 45.165 a dollar as of 12:06 p.m. in Manila, prices from the Bankers Association of the Philippines show. The currency was up 0.1 percent from Thursday, and has declined 1 percent since March.
“It’s more on the dollar strength as risk aversion prevailed for most of the week,” said Josef Paulo Reyes, a currency trader at the Development Bank of the Philippines in Manila. “If you look locally, the fundamentals of the peso are good given the lower inflation rate,” he said, forecasting it would trade from 45.05 to 45.45 a dollar in July.
Finance Secretary Cesar V. Purisima said on Monday the Philippines is in a stronger position to deal with heightened market volatility given its robust external and fiscal position. The drop in exports was worse than the median estimate in a Bloomberg survey for a 10-percent decline. Inflation was 1.2 percent, compared with 1.6 percent in May.