THE PESO is expected to continue trading near the P63-a-dollar level this week before the Bangko Sentral ng Pilipinas’ (BSP) policy meeting.
On Friday, the local unit recovered by 7.5 centavos to close at P62.985 per dollar from its record-low finish of P63.06 on Thursday, data from the Bankers Association of the Philippines’ website showed.
The currency also logged a new intraday record of P63.23, breaking the previous trough of P63.15 seen in the previous day.
Week on week, the peso declined by 18.4 centavos from its P62.801 finish on Oct. 9.
The peso slid early on Friday as faster-than-expected US inflation reinforced prospects of a Fed hike later this month, while fresh tariff threats triggered risk-off sentiment, a trader said by phone.
However, the currency managed to recoup its losses on profit taking before the weekend and as investors shed positions after the pair peaked, the trader added.
Market sentiment improved after the less hawkish signals from Fed Chair Kevin Warsh, coupled with lower global crude oil prices, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Mr. Ricafort also noted some signs of intervention above the P63 mark.
For this week, the trader said the peso may get some support from a potentially hawkish stance by the BSP.
A BusinessWorld poll conducted last week showed 20 of 22 economists expect the Monetary Board to raise rates by 25 basis points (bps) for a fourth straight time at its meeting on Thursday to bring the policy rate to 5.25%.
This would match the benchmark rate set in June 2025 and will be the highest in one-and-a-half years since the 5.5% in April 2025.
The peso could also be propped up by the seasonal increase in remittances, export sales, and dollar to peso conversions for holiday-related spending, Mr. Ricafort added.
The trader expects the peso to move between P62.80 and P63.20 against the dollar, while Mr. Ricafort sees it ranging from P62.70 to P63.20. — Aaron Michael C. Sy