ANGIE REYES-PEXELSTHE PESO may continue consolidating against the dollar this week as the market waits for fresh leads, with the Trump administration’s policies remaining in focus.
On Friday, the local unit closed at P57.33 per dollar, weakening by 10.8 centavos from its P57.222 finish on Thursday, Bankers Association of the Philippines data showed.
Week on week, the peso also went down by 7.9 centavos from its P57.251-per-dollar finish on March 14.
The peso dropped against the greenback on Friday due to risk-off sentiment, a trader said in a phone interview.
“Geopolitical risk and trade war uncertainty supported demand for safe-haven assets,” the trader said.
The local unit weakened as the dollar was generally stronger against Asian currencies on Friday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The dollar gained ground on Friday after US President Donald J. Trump hinted he would be flexible regarding a new round of tariffs expected to be imposed early next month, Reuters reported.
Even so, lingering economic uncertainties and churning geopolitical tension kept investors cautious.
Chicago Federal Reserve President Austan Goolsbee and New York Fed President John Williams said it would be premature to gauge the economic effects of Mr. Trump’s tariff actions, and the central bank has time to determine the direction of its monetary policy.
A spate of central bank policy meetings held investors’ focus for much of the week, with the Fed, the Bank of Japan and the Bank of England all holding rates steady.
The common theme among monetary policy makers was caution, with most adopting a “wait and see” stance toward Mr. Trump’s tariffs and trade policy, which has fostered what Fed Chair Jerome H. Powell called “unusually elevated” uncertainty.
Investors await clarification on details of Mr. Trump’s reciprocal tariffs expected to take effect on April 2.
Israeli airstrikes on Gaza and a huge blast from a Ukrainian drone attack on a Russian military airfield also dampened risk appetite and raised the appeal of safe-haven assets.
US economic indicators in the coming week will include housing and industrial data. On Thursday, the Commerce department will give its third and final take on fourth-quarter gross domestic product. Its personal consumption expenditures report is due on Friday.
The dollar gained ground against the euro, ending the week higher as the approaching tariff deadline prompted caution.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.33% to 104.13, with the euro down 0.32% at $1.0816.
Against the Japanese yen, the dollar strengthened 0.37% to 149.33.
US 10-year Treasuries turned higher to snap a four-day streak of declines as investors weighed tariff uncertainties against the probability that the Fed will hold rates steady for the time being.
The yield on benchmark US 10-year notes rose 1.9 basis points to 4.252% from 4.233% late on Thursday.
For this week, the trader said the peso could continue to consolidate against the greenback “as the market awaits clear signals from the Trump administration regarding the trade war and geopolitical risk and the effect of tariffs.”
“The market is directionless amid those issues,” the trader added.
“The Trump administration is preparing to announce a fresh wave of tariffs on April 2, though the exact scope is not clear,” Mr. Ricafort likewise said.
For this week, the trader said the peso could move between P57.10 and P57.50 per dollar, while Mr. Ricafort sees it ranging from P57 to P57.50. — A.M.C. Sy with Reuters
