Peso likely to trade sideways
Peso likely to trade sideways
THE PESO could trade sideways against the dollar this week as the market watches out for developments in US trade policies.
Legal uncertainties on US President Donald J. Trump’s trade policies a federal court decision to block his reciprocal tariffs lifted the dollar on Friday, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
The peso closed at P55.745 a dollar on Friday, weakening by 1.5 centavos from its P55.73 finish on Thursday, according to Bankers Association of the Philippines data posted on its website. Week on week, the peso fell 49.5 centavos.
The dollar strengthened against major peers including the euro and on track for a monthly gain against the Japanese yen. It weakened 0.15% to 143.95 against the yen, while the euro was down 0.12% at $1.135050, Reuters reported.
The dollar index, which measures the greenback against a basket of currencies including the yen and euro, rose 0.14% to 99.394. It was on track for a fifth straight month of losses, weighed down by tariff uncertainty.
The US Court of Appeals for the Federal Circuit in Washington said it was pausing a lower court’s ruling to consider the government’s appeal and ordered the plaintiffs in the cases to respond by June 5 and the government by June 9.
The Court of International Trade earlier blocked most of the US President’s tariffs in a sweeping ruling that said the President had overstepped his authority.
A trader expects the peso to be affected by developments in US trade policies this week.
Scheduled economic releases in the US, including inflation and labor data, could also sway the peso since these could dictate the US Federal Reserve’s next move.
Mr. Ricafort said the release of local inflation data for May could also affect the peso’s close.
Inflation last month likely slowed to 1.3%, according to a median estimate of 17 analysts in a BusinessWorld poll last week, from 1.4% in April and 3.9% a year ago and within the Bangko Sentral ng Pilipinas’ 0.9%-1.7% forecast.
This could have been the slowest price increase since November 2019. The Philippine Statistics Authority will release May inflation data on June 5.
Both the trader and Mr. Ricafort expect the peso to trade at P55.50 to P56 a dollar this week. — Aaron Michael C. Sy
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