Peso slips vs dollar on concerns over Trump administration’s policies
THE PESO slipped against the dollar on Thursday due to market worries over the Trump administration’s potential policies.
The local unit closed at P58.777 per dollar on Thursday, weakening by 4.2 centavos from its P58.735 finish on Wednesday, Bankers Association of the Philippines data showed.
The peso opened Thursday’s session weaker at P58.80 against the dollar. Its intraday best was at P58.75, while its worst showing was at P58.85 versus the greenback.
Dollars exchanged increased to $1.53 billion on Thursday from $1.43 billion on Wednesday.
The peso weakened as the market continued to reel from Donald J. Trump’s 2024 US presidential election win amid risks of higher US inflation, a trader said by phone.
Worries over the Trump administration’s policies also resulted in higher US Treasury yields, which supported the dollar, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Friday, the trader sees the peso moving between P58.55 and P58.85 per dollar, while Mr. Ricafort sees it ranging from P58.65 to P58.85 against the greenback.
The US dollar stood at a one-year high against major peers on Thursday and headed for a fifth straight daily gain fueled by higher yields and Mr. Trump’s election victory in the United States, Reuters reported.
The greenback climbed above 156 yen for the first time since July and was last at 155.85 yen.
Higher trade tariffs and tighter immigration under the incoming Trump administration are projected to fuel inflation, potentially slowing the Federal Reserve’s rate cutting cycle longer term.
These, alongside expectations for deeper deficit spending and higher short term economic growth are lifting Treasury yields, providing the dollar with additional support.
The benchmark 10-year Treasury yield hit 4.483% on Thursday, its highest since July.
The President-elect’s Republican Party will control both houses of Congress when he takes office in January, Edison Research projected on Wednesday, giving him wide powers to push his agenda.
The US dollar index, which measures the currency against six top counterparts including the euro and yen, added 0.2% to 106.69, its highest since early November 2023.
The dollar had dipped briefly on Wednesday after a measure of US consumer inflation met economists’ forecasts, keeping the Fed on track to reduce rates at their meeting in December, though traders saw this as a buying opportunity. — A.M.C. Sy with Reuters
