Peso surges to near 7-month high as dollar extends slide

THE PESO jumped to a near seven-month high on Monday as the dollar continued to reel amid tariff concerns and US President Donald J. Trump’s threats to fire US Federal Reserve Chair Jerome H. Powell.

The local unit closed at P56.61 per dollar on Monday, surging by 19 centavos from its P56.80 finish on Wednesday, Bankers Association of the Philippines data showed.

This was the peso’s best finish in nearly seven months or since its P56.295 close on Oct. 4, 2024.

The peso opened Monday’s session sharply stronger at P56.64 against the dollar. It traded better than Wednesday’s close for the entire session as its weakest was at just P56.65, while it climbed to its intraday best of P56.48 versus the greenback.

Dollars traded fell to $1.46 billion on Monday from $2.3 billion on Wednesday.

“The pair closed higher on broad dollar weakness amid the intensifying trade war and concerns over Fed Chair Powell’s position following Trump’s criticisms. The dollar extended its losses,” a trader said in a phone interview.

The peso was also supported by remittances following the long weekend, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort likewise said in a Viber message.

For Tuesday, the trader sees the peso moving between P56.40 and P56.70 per dollar, while Mr. Ricafort said it could range from P56.50 to P56.70.

The dollar tumbled on Monday as investor confidence in the US economy took another hit over Mr. Trump’s plans to shake up the Federal Reserve, which would throw into question the independence of the central bank, Reuters reported.

White House economic adviser Kevin Hassett said on Friday that the president and his team were continuing to study whether they could fire Mr. Powell, just a day after Mr. Trump said Mr. Powell’s termination “cannot come fast enough” as he called for the Fed to cut interest rates.

Against the Swiss franc, the dollar sank more than 1% to a 10-year trough of 0.80695, while the euro peaked at $1.153525, its highest since November 2021.

The dollar also hit a seven-month low of 140.615 yen.

Against a basket of currencies, the dollar slid to a three-year low of 98.164 on Monday. The New Zealand dollar jumped more than 1% to $0.6013.

Mr. Trump’s sweeping tariffs and uncertainty over his trade policies have sent global markets into a tailspin and darkened the outlook for the world’s largest economy, in turn weakening the dollar as investors pull money out of US assets. — Aaron Michael C. Sy with Reuters