THE PESO may depreciate this week amid major economic data releases in the United States, such as the third-quarter gross domestic product (GDP) report, which could provide clues for the US Federal Reserve’s next move.

The local unit closed at P58.75 per dollar on Friday, gaining 19 centavos from its P58.94 finish on Thursday, based on Bankers Association of the Philippines data.

Week on week, the peso also strengthened by 18.5 centavos from its P58.935 close on Oct. 14.

The local unit opened Friday’s session at P58.92 per dollar. Its weakest showing was at P58.97, while its intraday best was at P58.68 versus the greenback.

Dollars exchanged increased to $897.5 million on Friday from $707.45 million on Thursday.

The peso appreciated after the Finance chief said the government will continue to support the peso by tapping their dollar reserves, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Finance Secretary Benjamin E. Diokno last week said the government will act “aggressively” to prevent the peso-dollar exchange rate from breaching P60 and bring it back to P55 by yearend, which is “where [they] want it to be.”

The country’s gross international reserves as of September stood at $93 billion, 4.5% lower than the $97.4 billion at end-August.

The central bank could also consider a cumulative 100 basis points in hikes at their Nov. 17 and Dec. 15 meetings to support the currency, Mr. Diokno said.

If realized, this would bring the Bangko Sentral ng Pilipinas’ (BSP) policy rate to 5.25% — the highest since the central bank adopted the interest rate corridor framework in 2016.

For this week, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the market will be on the lookout for US third-quarter GDP data and personal spending indicators as these could could support another large rate hike from the Federal Reserve.

Political disorder in the United Kingdom would also contribute to safe-haven demands for dollars, Mr. Asuncion said.

However, the peso will continue to hold on to P59-a-dollar level as investors position ahead the Fed’s policy meeting next week and the BSP’s meeting on Nov. 17.

For this week, Mr. Ricafort gave a forecast range of P58.55 to P58.95 per dollar, while Mr. Asuncion sees a weaker band of P58.70 to P59.20 against the greenback. — K.B. Ta-asan