THE PESO may trade sideways against the dollar this week as investors await the release of key US and Philippine economic data.
The local unit closed at P56.265 per dollar on Friday, jumping by 29 centavos from its P56.555 finish on Thursday, Bankers Association of the Philippines data showed.
This was the peso’s best close in nearly seven months or since its P56.178 finish on Oct. 2, 2024.
Week on week, the peso surged by 53.5 centavos from its P56.80-per-dollar close on April 16.
“The dollar-peso closed [stronger], still on dollar weakness due to recession fears after China delayed trade talks with the US. Later on, there were news that China was suspending tariffs on US imports,” a trader said in a phone interview.
The dollar was weaker in the Asian session on Friday after Federal Reserve Governor Christopher Waller said in a Bloomberg Television interview that he would support rate cuts if the Trump administration’s tariff policies hit the labor market, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For this week, the trader said peso-dollar trading could be driven by the release of first-quarter US gross domestic product and March US personal consumption expenditures index data, as well as the latest US jobs report. At home, the market will monitor the release of march trade data.
The trader said the peso may move between P56.20 and P56.70 against the dollar this week, while Mr. Ricafort sees it ranging from P56 to P56.50.
The dollar staged a broad retreat on Thursday, as investor gloom over the lack of progress towards defusing the US-China trade war reasserted itself following an interlude of optimism the previous day, Reuters reported.
US assets, including the dollar, rallied on Wednesday after US President Donald J. Trump backed down from threats to fire the head of the Federal Reserve and appeared to soften his stance on China.
Treasury Secretary Scott Bessent said separately that the de facto embargo on US-China trade was unsustainable, but that the US would not move first in lowering its levies of more than 100% on Chinese goods.
By Thursday, those dollar gains had unraveled. China said there had been no negotiations on the economy and trade and it urged the US to lift all unilateral tariff measures if it really wished to resolve the issue, leaving investors roughly where they were earlier in the week in terms of clarity.
In the US session on Friday, the dollar headed for its first weekly gain since mid-March after China granted some exemptions to US imports, raising expectations that the trade war between the world’s two largest economies may be closer to abating.
The dollar was higher against a basket of currencies, rising around 0.3% on the day and set for a modest weekly gain of 0.6%, its first since the middle of March. — Aaron Michael C. Sy with Reuters
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