THE PESO weakened anew against the dollar on Thursday on cautious remarks from US Federal Reserve officials amid policy uncertainty in the world’s largest economy.
The local unit closed at P58.18 per dollar on Thursday, weakening by 8.5 centavos from its P58.095 finish on Wednesday, Bankers Association of the Philippines data showed.
The peso opened Thursday’s session stronger at P57.92 against the dollar. It rose to as high as P57.88 but failed to hold on to its gains, closing near its intraday low of P58.199 versus the greenback.
Dollars exchanged went down to $1.52 billion on Thursday from $1.82 billion on Wednesday.
The peso declined against the dollar following cautious signals from Fed officials, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Federal Reserve officials on Wednesday pointed to the large policy uncertainty around tariffs and other issues arising from the early days of President Donald J. Trump’s administration as among the top challenges in figuring out where to take US monetary policy in the months ahead, Reuters reported.
Chicago Fed President Austan Goolsbee warned that ignoring the potential inflationary impact of tariffs would be a mistake, whereas Richmond Fed President Thomas Barkin said it remains impossible at this early stage to know where cost increases from any tariffs might be absorbed or passed along to consumers.
The views of the two US central bankers were emblematic of the cautious approach Fed officials are angling to take in deciding whether to resume interest rate cuts later this year or continue to keep them on hold. The Fed left its benchmark interest rate unchanged last week in the 4.25%-4.5% range after cutting it at three straight meetings to close out 2024.
“The peso followed the stronger dollar after strong ADP data last night,” a trader added in a phone interview.
Overnight, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, languished near its lowest in over a week at 107.61, Reuters reported.
US private payrolls growth picked up in January, the ADP National Employment Report showed on Wednesday.
Private payrolls increased by 183,000 jobs last month after an upwardly revised 176,000 rise in December. Economists polled by Reuters had forecast private employment advancing by 150,000 following a previously reported 122,000 gain in December.
For Friday, the trader expects the peso to move between P57.80 and P58.30 per dollar, while Mr. Ricafort sees it ranging from P58.05 to P58.25. — A.M.C. Sy with Reuters
