Peso may remain stressed by tariff worries, while the dollar remains at P55 levels
The peso could stay at the p55 level this week, as the dollar could be under pressure as the market is awaiting development of ongoing tariff negotiations between the U.S. and its major trading partners.
The local department was P55.57 per dollar on Friday, compared with the 27 Centavos score of Wednesday's P55.84, Data from the Philippine Bankers Association shows.
This is the best close for the peso in over a year, or since the price of the P55.53-A on March 15, 2024.
One week, the peso closed P56.265's 69.5 Centavos from April 25.
A trader said in a phone interview that the peso was stronger on Friday due to weaker U.S. GDP and manufacturing data due to weaker U.S. GDP, and manufacturing data, a trader said.
The U.S. economy signed for the first time in three years in the first quarter, as businesses compete to avoid the higher costs of tariffs, and highlighted the destructiveness of President Donald J. Trump's often chaotic trade policies, Reuters reported.
Economists expect the economy to rebound in the second quarter as resistance to imports fades, but may not be enough to avoid a recession or a period of warm growth and high inflation, often called stagnation. They say it is crucial to address the uncertainty created by the Trump administration's ever-shifting tariff stance.
The Economic Analysis Bureau of the Ministry of Commerce said in advance that its GDP in the previous quarter fell 0.3% last quarter, the first decline since the first quarter of 2022.
The decline in federal spending has also made it lower, which may be linked to aggressive cuts by the White House, marking a massive shooting and a plan to shut down.
The report captures activities ahead of Mr. Trump’s “Liberation Day” tariff announcement, which announced most imports from U.S. trading partners, including raising the responsibility for Chinese goods to 145%, sparking a trade war with Beijing.
Reuters surveyed economists and predicted GDP growth at a rate of 0.3% between January and March.
Another report shows that manufacturing industry signed further contracts in April, and the tight supply chain of tariffs on imported goods has increased the price of investment and kept the narrative going.
The Supply Management Institute’s Manufacturing Purchasing Managers Index (PMI) fell to a five-month low of 48.7, slightly higher than expected, while the March reading volume was 49.0. A PMI reading below 50 indicates contraction. Economists who voted by Reuters predict that the PMI fell to 48.
PESO is also supported by remittances from overseas Filipinos ahead of the new school year in the coming weeks, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., added in the Viber message.
The trader said this week, U.S. non-farm payroll data could drive PESO dollar trading on Friday.
Employers continue to hoard workers as Mr. Trump's trade protectionist trade policy exacerbates economic uncertainty, with job growth in the U.S. slowing slightly in April, Reuters reported, but the outlook for the labor market is getting darker.
The closely watched employment report of the Labor Department, released on Friday, also showed that the unemployment rate stabilized at 4.2% last month, which helped ease concerns that the economy signed a recession in the first quarter due to the flood of tariffs on imports after GDP signed in the first quarter. Still, the labor market is too early, indicating that the impact of Mr. Trump’s re-tariff policy is too early.
The Ministry of Labor Statistics Bureau said that the non-agricultural wage increased by 177,000 jobs last month, following a drop of 185,000 in March. Economists who voted by Reuters predicted 130,000 jobs added after 228,000 advances reported in March.
“The market will also closely monitor trade negotiations between the United States and China,” the trader added.
Riccaford said the release of Philippine inflation data on Tuesday and the Federal Open Market Committee's policy meeting this week could also affect local departments.
He said the peso could move between P55.40 and P55.90 per dollar this week, and traders expect it to range from P55.50 to P56.
one BusinessWorld The median estimate of April Consumer Price Index (CPI) was 1.8% from a poll of 14 analysts. This is 1.3% to 2.1% in Bangkok's Sentral Ng Pilipinas' (BSP) this month.
If achieved, inflation in April will start to stabilize from March prints and will be slower than the 3.8% clip logged in the same month of 2024.
This will also mark the ninth consecutive month of CPI's settlement within the 2-4% target range of BSP. – AMC SY and Reuters
