THE PESO could slide further this week and may even test the P52 level as the dollar strengthens further, driven by better-than-expected economic growth in the United States and market caution ahead of the appointment of a new Federal Reserve chair.

The local unit closed at P51.76 on Friday, moving sideways from the P51.75 level the previous day as it hit an intraday peak at P51.85.

The peso likewise hit a fresh 11-year-low last week at P51.77 versus the greenback on Wednesday.

Week on week, the peso depreciated by 31 centavos from its P51.45-per-dollar finish last Oct. 20.

Traders interviewed late last week said the peso could slip further as the dollar firms up, supported by positive economic data out of the United States.

“The dollar might cautiously appreciate this week, driven by better-than-expected US third-quarter GDP (gross domestic product) growth, potentially hawkish remarks from the US Federal Reserve, and likely stronger US reports on employment and personal consumption expenditure inflation,” Guian Angelo S. Dumalagan, market economist at the Land Bank of the Philippines, said via e-mail.

US GDP expanded by 3% during the third quarter, Reuters said in a report, with the government’s first estimate beating market expectations.

Another trader said the dollar will “strengthen once again” on the back of a faster GDP print in the US, noting that market players are likewise being extra cautious in anticipation of President Donald J. Trump’s choice as the next Fed chair.

“If Trump chooses (John) Taylor – who is seen as the hawkish candidate – we might test the P52 level. But if they choose (Jerome) Powell which markets see as the most likely candidate, we could see some consolidation at this new range,” the trader said, noting signs of profit taking during Friday’s session ahead of the Fed announcement.

Mr. Trump is working with a Nov. 3 deadline to name the next Fed chair as incumbent chief Janet L. Yellen’s four-year term expires by February. Mr. Taylor is the President’s economic advisor, while Mr. Powell is a Fed governor.

The trader expects the peso to trade between the P51.60-P51.85 range this week. On the other hand, Mr. Dumalagan gave a wider estimate at P51.50-P52 as he also expects upbeat US inflation and jobs data which will be released within the week, which would support the plan for another interest rate hike by December.

“The factors that could reverse the dollar’s projected upward bias include the appointment of Powell as the next head of the US Federal Reserve or the unexpected re-appointment of incumbent Fed Chair Yellen,” he said.

Back home, financial markets will be closed on Tuesday and Wednesday for All Saints’ Day.