Peso ends volatile week at 17-month low

The Philippine peso capped a turbulent trading week sinking to a 17-month low as growing risk aversion amid escalating tensions in the Middle East continued to prop up the greenback.

The local currency closed at 57.65 against the US dollar on Friday, 46 centavos weaker than its previous finish of 57.19.

Data showed this was its worst performance since Nov. 10, 2022, or when the peso had closed at 58.19 against the US currency.

On the last trading day of the week, the local currency posted an intra-day low of 57.655, while its best showing stood at 57.32.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said Israel’s retaliatory missile attack on Iran set off a capital flight to safety, powering up the US dollar which had already gained ground recently amid expectations of a delayed rate cut by the US Federal Reserve.

“Next important resistance level over the past 1.5 years: 57.70 levels,” Ricafort said in a commentary.

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The 57-level versus the dollar is a critical barrier for the Bangko Sentral ng Pilipinas, which moved to defend the peso when the currency touched the ceiling last year. But Governor Eli Remolona Jr. said the central bank “has hardly been intervening” in the foreign-currency market recently, adding that this “initial” depreciation would not have an immediate impact on monetary policy.

The peso is hovering above the revised assumption of the Marcos administration, which projects the peso to trade between 55 and 57 against the greenback this year.