Peso hits near four-month high as dollar falls on weak US data

The peso jumped to a near four-month high against the dollar on Wednesday following the release of softer-than-expected US retail sales data that could indicate weakness in the world’s largest economy.

The local unit gained by 24 centavos to close at PHP 58.29 versus the greenback from its PHP 58.53 finish on Tuesday, data from the Bankers Association of the Philippines showed.

This was the peso’s strongest finish in almost four months or since it closed at PHP 58.225 on Oct. 21, 2025.

The currency opened Wednesday’s trading session sharply stronger at PHP 58.44 against the dollar. Its intraday low was at just PHP 58.48, while its best showing was at PHP 58.255 against the greenback.

Dollars traded increased to USD 1.46 billion from USD 1.179 billion on Tuesday.

“The peso gained after the US retail sales report for December posted a flat growth despite the expected boost from the holiday season,” a trader said in an e-mail.

US retail sales were unexpectedly unchanged in December as households scaled back spending on motor vehicles and other big-ticket items, potentially setting consumer spending and the economy on a slower growth path heading into the new year, Reuters reported.

The flat reading in retail sales last month followed an unrevised 0.6% increase in November, the Commerce department’s Census Bureau said on Tuesday. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, would rise by 0.4%.

Sales increased 2.4% year on year in December. October’s monthly sales were revised to show them declining 0.2% instead of 0.1% as previously estimated.

The dollar struggled across the board on Wednesday, particularly against the yen and Australian dollar, with the Japanese currency continuing to outperform after Prime Minister Sanae Takaichi’s landslide election victory.

The dollar was down 0.75% against the yen at JPY 153.25, taking its losses to 2.5% since Friday’s close before Ms. Takaichi’s weekend win.

The euro was up 0.16% to USD 1.1914, sterling gained 0.3% to USD 1.3680, and the US currency was down 0.25% against the Swiss franc at 0.7659.

US jobs data for January, delayed from last week due to the short government shutdown, could be the next test for this weakening dollar trend later on Wednesday.

Nonfarm payrolls likely increased by 70,000 last month after rising 50,000 in December, a Reuters survey of economists showed, and a large beat or miss will shape expectations for Federal Reserve policy.

The peso was also supported by Philippine foreign direct investments (FDI) data that indicated improved sentiment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Central bank data showed that FDI net inflows dipped by 0.3% year on year to USD 897 million in November. Still, this was the highest in four months or since the USD 1.271 billion in July.

For Thursday, the trader said the peso could rise further on the US jobs data to be released overnight.

The trader sees the local unit moving between PHP 58.15 and PHP 58.40 per dollar, while Mr. Ricafort expects it to range from PHP 58.20 to PHP 58.40. — Aaron Michael C. Sy with Reuters