Peso down on Delta variant worries, tighter restriction measures

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THE PESO weakened on Friday as the government reported more cases of the Delta variant of the coronavirus disease 2019 (COVID-19) in the country.

The local unit closed at P50.34 per dollar on Friday, sinking by 20.5 from its P50.135 finish on Thursday, based on data from the Bankers Association of the Philippines.

It also depreciated by 10.5 centavos from its P50.235-a-dollar finish last week.

The peso opened Friday’s session at P50.10 against the dollar. Its weakest showing was at P50.35, while its intraday best was at P50.075 versus the greenback.

Dollars exchanged declined to $804.6 million on Friday from $948.95 million on Thursday.

The trader attributed the peso’s depreciation to escalating worries over rising Delta variant cases in the country.

The Palace on Friday said Metro Manila will be under general community quarantine “with heightened restrictions” until July 31 to prevent the further spread of the Delta variant, which has already sickened 47 in the country.

The Philippines has also expanded its travel ban on countries with rising cases of the Delta variant of COVID-19 to include Malaysia and Thailand.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso weakened as the dollar continued to strengthen against major currencies.

The dollar was set to end the week with small gains after a turbulent few days when currencies were buffeted by shifting risk appetite, with the market’s focus now on next week’s US Federal Reserve meeting, Reuters reported.

The dollar index was up 0.2% for the week, rising slightly on Friday to stand at 92.891.

But that was off a 3-1/2-month high of 93.194 hit on Wednesday, after strong Wall Street earnings helped investors regain some of the confidence lost to earlier worries the Delta variant of the coronavirus could derail the global economic recovery. — LWTN with Reuters

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