Philippine peso may breach P59 to a US dollar

MANILA – The Philippine peso may fall to its weakest level of P59 a dollar just like in October last year if it continues to weaken to P56.50 in the short term.

This is the projection of the foreign exchange brokerage FBS, Business World reported.

“In the less likely scenario that the price breaks and holds above the level of P56.50, the price may move to a historical high of P59.20,” FBS said.

The peso could appreciate further if its P50 to P52 a dollar, FBS said.

The peso has not hit P56.50 a dollar since its P56.56 close on Nov. 29. It closed at an all-time low of P59 a dollar on Oct. 17.

FBS market analysts expect the peso at P56.40 to P56.45 against the dollar, based on inflation and policy decisions of the Philippine central bank.
Another financial analyst said the Philippine peso is expected to stabilize between 55 to 56 against the greenback ahead of the expected pause in the Federal Reserve’s rate hiking cycle and continuation of the same decision for the Bangko Sentral ng Pilipinas (BSP).
In a report, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the local currency has eased to among its one-week lows since 2022 when it ended last week’s trading at 56.05.
“(It) could stabilize at 55.00-56.00 levels,” he said, weaker than the 53 to 54 he forecasts as floor levels earlier in the  year.
Ricafort said the next resistance level for the local unit is around 56.30 while the major resistance level is around 56.35 to 56.95.
He said this range “need(s) to be protected vs. further upside or risk of higher inflation.”
Ricafort said among the factors seen to drive the foreign exchange market this week is the rate decision of the Federal Reserve which is expected to maintain its key rates after the meeting of the Federal Open Market Committee (FOMC) on June 13-14.
Another driver is the possible continuation of the BSP’s policy-making Monetary Board’s (MB) decision to again keep the central bank’s key rates steady, similar to its decision last month, as domestic inflation continues to decelerate.

Inflation slowed to 6.1% in May from 6.6% print in April, but still faster than 5.4% a year earlier. It was within the central bank’s 5.8-6.6% estimate for the month.

It was also the 14th straight month that the rate breached the central bank’s 2-4% target for the year.