THE PESO will likely move sideways against the dollar today amid geopolitical tensions overseas and ahead of the policy meeting of the US central bank.
The local currency slipped versus the US unit on Friday. It retreated to its near 12-year low at P52.70, 21 centavos weaker than the P52.49-per-dollar finish the previous day.
Week-on-week, the peso also declined from its P52.55 finish on June 1.
Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines (LANDBANK), said the dollar will move sideways against the peso “due to sustained safe-haven demand amid geopolitical concerns abroad.”
In a Reuters report, US President Donald J. Trump announced that he was backing out of the Group of 7 communique after he left the summit in Canada, expressing his anger toward Canadian Prime Minister Justin Trudeau.
“PM Justin Trudeau of Canada acted so meek and mild during our G7 meetings only to give a news conference after I left saying that, ‘US tariffs were kind of insulting’ and he ‘will not be pushed around,’” Mr. Trump said in a tweet. “Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!”
In his press conference, Mr. Trudeau had spoken of the retaliatory measures that Canada would take in response to Mr. Trump’s decision to slap tariffs on steel and aluminum from Canada, Mexico and the European Union.
“While the culmination of the G7 summit reduces some tension in the geopolitical front, the issues left open by the said conference,” Mr. Dumalagan said.
He also noted that the meeting between the leaders of US and North Korea on June 12 “could prevent investors from breathing a sigh of relief.”
Mr. Trump and North Korean leader Kim Jong-un are scheduled to hold a historic summit in Singapore to talk about the denuclearization of North Korea as well as peace in the Korean peninsula.
“Lingering geopolitical issues could prompt investors to hold on to the safer dollar and remain on the sidelines ahead of the June 12 Independence Day break,” Mr. Dumalagan added.
Meanwhile, another trader said the peso-dollar exchange would move sideways ahead of the Federal Open Market Committee meeting starting Wednesday.
The market is expecting the Federal Reserve to raise its benchmark rates following the same move in March.
Mr. Dumalagan noted that the market’s rate hike expectations “could improve the dollar’s relative attractiveness” in the coming days.
For this week, Mr. Dumalagan sees the peso to move between P52.30 and P52.90, while the trader gave a P52.40-P52.90 range. — Karl Angelo N. Vidal