By BusinessWorld,Cedtyclea

Copyright bworldonline

THE PESO sank on Tuesday as concerns over the health of the French economy drove safe-haven demand for the dollar.

The local unit closed at P57.295 versus the greenback, falling by 23.9 centavos from its P57.056 finish on Monday, Bankers Association of the Philippines data showed.

The peso opened Tuesday’s session stronger at P56.95 versus the dollar, which was also its intraday high. Its worst showing was at P57.33 against the greenback.

Dollars exchanged surged to $1.86 billion on Tuesday from $1.27 billion on Monday.

“The dollar-peso closed higher on market risk-off sentiment due to escalating concerns over France’s economy, which favored the dollar safe-haven demand,” a trader said in a phone interview.

For Wednesday, the trader sees the peso moving between P57.10 and P57.40 per dollar.

The US dollar was steady on Tuesday as investors took a beat to parse a hawkish tilt in comments by members of the Federal Reserve, while awaiting remarks on the economic outlook by Chair Jerome H. Powell, Reuters reported.

The greenback fluctuated between gains and losses, last trading flat after snapping a three-day winning streak on Monday, with the US dollar index last at 97.36.

Mr. Powell was set to speak on the economic outlook later on Tuesday and some central bank policymakers renewed focus on inflation risks in remarks on Monday, prompting a slight easing of wagers on a rate cut by the Fed next month.

Meanwhile, markets showed a largely muted reaction to a mixed bag of business survey readings in Europe.

While data showed that euro zone business activity grew at its fastest pace in 16 months in September, it also pointed to French economic activity contracting the same month at the sharpest rate since April. — AMCS with Reuters