Peso jumps to P55 level as weak US data fuel Fed cut bets

THE PESO on Wednesday closed at the P55-per-dollar level for the first time since September as weak US economic data bolstered US Federal Reserve rate-cut bets.

The local unit closed at P55.84 per dollar on Wednesday, surging by 30.5 centavos from its P56.145 finish on Tuesday, Bankers Association of the Philippines data showed.

This was the peso’s strongest finish in more than seven months or since its P55.69 close on Sept. 20, 2024. This was also the first time it ended at the P55 level since Sept. 26, 2024’s P55.965.

The peso opened Wednesday’s trading session stronger at P56.005 against the dollar. Its worst showing was at just P56.06, while its intraday best was at P55.833 versus the greenback.

Dollars exchanged went down to $1.68 billion on Wednesday from $1.78 billion on Tuesday.

Philippine financial markets are closed on May 1 (Thursday) for Labor Day.

The peso surged as the dollar remained fragile following weak US Job Openings and Labor Turnover Survey and consumer confidence data, a trader said in a phone interview.

The reports fueled expectations of rate cuts by the Fed amid recession fears, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

Tuesday’s data highlighted a gradually declining economy, Reuters reported. US job openings dropped sharply in March, but a decline in layoffs suggested that the labor market remained on solid footing despite an ever-shifting tariff policy casting a pall over the economy.

The Conference Board’s US consumer confidence index, on the other hand, sank to a nearly five-year low in April on tariff concerns.

Markets are now pricing in 97 basis points (bps) worth of rate cuts from the Fed by December, up from about 80 bps early last week.

The dollar is on track for its worst monthly performance since November 2022 with a 4.7% loss against a basket of peers. — Aaron Michael C. Sy with Reuters