THE PESO weakened once again against the dollar on Monday as the conflict between Russia and Ukraine escalates.
The local currency finished at P58.99 per dollar on Monday, declining by 12 centavos from its closing of P58.87 on Friday, according to data from the Bankers Association of the Philippines.
The peso commenced Monday’s trading session slightly stronger at P58.85 against the dollar. Its best intraday performance was P58.80, while its worst was a record low of P59 against the greenback.
The local currency closed at the P59-per-dollar mark on Thursday, matching the all-time low last recorded on October 17, 2022, before recovering on Friday.
The volume of dollars traded decreased to $1.06 billion on Monday from $1.07 billion on Friday.
“The US dollar/peso exchange rate has been higher lately due to some geopolitical risks tied to the Russia-Ukraine conflict since last week, particularly regarding the potential escalation of the situation,” stated Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message.
“Moving forward, the peso’s performance will be influenced in part by interventions, as consistently observed over the past two years, particularly in the efforts to better manage inflation and inflation expectations to meet the price stability directive that also necessitates stability in the peso exchange rate,” Mr. Ricafort emphasized.
The peso fell against the dollar amid forecasts of potentially robust US economic reports to be released later this week, according to a trader in an email. The US personal consumption expenditures data for October is scheduled for release on November 27 (Wednesday).
For Tuesday, both the trader and Mr. Ricafort anticipate the peso to fluctuate between P58.80 and P59 against the dollar.
“Ongoing pressures on the US dollar and profit-takers might keep the local currency movement stable,” noted the trader.
Ukrainian authorities reported on Monday that Russian troops attacked energy infrastructure in Mykolaiv’s southern region and industrial sites in Zaporizhzhia overnight, as reported by Reuters.
As of Monday morning, engineers had restored power to the majority of customers experiencing outages due to the attack, according to Mykolaiv governor Vitaliy Kim via the Telegram messaging platform.
The governor stated that there were no casualties and mentioned that air defense systems shot down two drones over the region.
Additionally, Russia launched “tens of drones” to target Zaporizhzhia overnight, regional governor Ivan Fedorov disclosed on national television.
Ukrainian President Volodymyr Zelensky reported on Sunday that Russia deployed around 460 drones and over 20 missiles against Ukraine in the preceding week.
In other news, the dollar relinquished some of its recent gains on Monday as the nomination for US Treasury secretary appeared to reassure the bond market and lowered yields, moderating some of the currency’s rate advantage.
Yields on 10-year Treasuries decreased to 4.351%, down from 4.412% late Friday, as President-elect Donald Trump’s selection of fund manager Scott Bessent was well-received by the bond market, recognized as an experienced Wall Street figure and fiscal conservative.
Nevertheless, Mr. Bessent has also openly endorsed a strong dollar and supported tariffs, implying that any retrenchment in the currency might be short-lived.
The dollar is likely due for some consolidation after rising for eight consecutive weeks, an occurrence that has only happened three times this century, with many technical indicators suggesting it is overbought.
The index last stood down 0.5% at 106.950, having reached a two-year high of 108.090 on Friday. The dollar fell 0.4% against the Japanese yen to 154.11, distancing itself from its recent peak of 156.76. — Luisa Maria Jacinta C. Jocson with Reuters
