Peso rebounds to P56 level as Philippines finalizes trade deal with US
THE PESO rebounded to the P56-per-dollar level on Wednesday after the Philippines secured a slightly lower “reciprocal” tariff rate from the United States.
The local unit closed at P56.881 per dollar, strengthening by 16.9 centavos from its P57.05 finish on Tuesday, Bankers Association of the Philippines data showed.
This was the peso’s best close in over a week or since it ended at P56.73 on July 15, which was also the last time it finished at the P56 mark.
The peso opened Wednesday’s session sharply stronger at P56.85 against the dollar, which was also its intraday best. Its worst showing was at just P56.98 against the greenback.
Dollars exchanged climbed to $1.51 billion on Wednesday from $1.29 billion on Tuesday.
“The peso continued to appreciate after the Philippines secured a trade deal with the US overnight,” the first trader said in a Viber message.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the reduced tariff rate on Philippine exports to the US to 19% from 20% boosted investor sentiment “on hopes that the worst for the US tariffs could have already been seen for the Philippines.”
The new tariff rate — which was still higher than the 17% announced by US President Donald J. Trump in April — came at the close of President Ferdinand R. Marcos, Jr.’s three-day state visit to Washington.
The local unit also gained amid the dollar’s decline against Asian currencies and lower US Treasury yields after more countries in the region finalized deals with the Trump administration, the second trader said in a text message.
For Wednesday, the first trader said the peso could depreciate anew against the dollar on expectations that the European Central Bank will hold its key interest rates, which could provide support for the greenback.
The first trader and Mr. Ricafort see the peso moving between P56.75 and P57 versus the dollar on Thursday, while the second trader expects it to range from P56.80 to P57.20. — A.M.C. Sy
