Peso slips with US shutdown nearing end

The peso slipped against the dollar on Tuesday as the market awaited updates on the possible reopening of the US government.

The local unit closed at PHP 58.985 per dollar, dipping by 2.5 centavos from its P58.96 finish on Monday, Bankers Association of the Philippines data showed.

The peso opened the session flat at PHP 58.96 against the greenback. Its intraday high was at PHP 58.865, while its worst showing was at PHP 59.005 versus the dollar.

Dollars traded increased to USD 1.47 billion on Tuesday from USD 1.38 billion on Monday.

“The dollar-peso moved sideways but closed a tad higher as players await developments on the potential resolution of US government shutdown,” a trader said in a phone interview.

The US Senate passed a deal on Monday that would restore US federal funding and end the longest shutdown, Reuters reported.

It now heads to the House, where Speaker Mike Johnson has said he would like to pass it as soon as Wednesday and send it on to President Donald J. Trump to sign into law.

Prediction markets, such as the online Polymarket, have reopening nearly fully priced in for the end of the week.

The nearly six-week shutdown will have likely already knocked somewhere between 0.4 and 1 percentage points from fourth-quarter gross domestic product, said UBP economist Carlos Casanova in Hong Kong.

Fears that damage caused by recent typhoons could further weaken Philippine economic growth weighed on the peso, Rizal Commercial banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

He added that the stock market’s weakness also affected sentiment. The Philippine Stock Exchange index closed at a fresh over five-year low of 5,629.07 on Tuesday.

For Wednesday, the trader said the peso could move between PHP 58.80 and PHP 59.10 per dollar, while Mr. Ricafort sees it ranging from PHP 58.85 to PHP 59.10. — A.M.C. Sy with Reuters