THE PESO recorded its worst close since November 2022 on Tuesday due to a stronger-than-expected US retail sales report and escalating tensions between Iran and Israel.
The local unit closed at P57 per dollar on Tuesday, weakening by 19.2 centavos from its P56.808 finish on Monday, Bankers Association of the Philippines data showed.
This was the peso’s worst finish and was the first time it ended at the P57 level since its P57.375-a-dollar close on Nov. 22, 2022.
The peso opened Tuesday’s session at weaker P56.85 against the dollar, which was already its intraday best. Its weakest showing was its close of P57.
Dollars exchanged went down to $1.1 billion on Tuesday from $1.59 billion on Monday.
The peso was dragged down by the US retail sales report coupled with rising tensions in the Middle East, Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.
“The peso depreciated to the P57 level following the stronger-than-expected US retail sales report,” a trader likewise said in an e-mail.
The data could reduce the need for the US Federal Reserve to cut interest rates, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
US retail sales rose 0.7% last month, compared with the 0.3% rise that economists polled by Reuters had forecast. Data for February was also revised higher to show sales rebounding 0.9%, which was the largest gain in just over a year, instead of the previously reported 0.6%.
For Wednesday, the trader said the peso could weaken further due to potentially hawkish remarks from Fed Chair Jerome H. Powell.
The trader sees the peso moving between P56.85 and P57.10 per dollar on Wednesday, while Mr. Ricafort expects it to range from P56.90 to P57.05. Meanwhile, Mr. Roces said the peso could remain at the P57 level for the rest of the week. — Aaron Michael C. Sy with Reuters