Peso may stay above PHP 60 on prolonged Iran conflict

The peso could hold above the PHP 60 line versus the US dollar this week on continued preference for the safe-haven currency due to the prolonged Middle East conflict.

On Wednesday, the local unit jumped by 58.8 centavos to end at PHP 60.16 against the greenback from its all-time-low PHP 60.748 finish on Tuesday, data from the Bankers Association of the Philippines showed. This came following signals from US President Donald J. Trump on a possible end to Iran war.

Week on week, the peso surged by 39 centavos from its PHP 60.55 finish on March 27. Philippine markets were closed on April 2 and 3 for Holy Week.

For this week, the peso could see some pressure in catch-up trading after the two-day break as Mr. Trump again made fresh threats towards Iran, causing renewed market volatility and flight to the safe-haven greenback.

“[Market players] will continue to monitor developments in the Iran war,” a trader said by phone.

The US’ continued military operations in Iran despite talks of a ceasefire will keep the peso weak, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

Meanwhile, the release of March Philippine inflation data on Tuesday (April 7), which likely showed a faster print due to the war’s impact on domestic fuel prices, would also provide the market with leads, the trader added.

A BusinessWorld poll of 18 analysts yielded a median estimate of 3.8% for March headline inflation, faster than the 2.4% in February and 1.8% in the same month a year ago. This is close to the upper end of central bank’s 3.1%-3.9% forecast for the month and its 2%-4% annual target.

If realized, the headline print would be the fastest in 20 months or since the 4.4% seen in July 2024.

The trader sees the peso moving between PHP 60 and PHP 60.50 per dollar this week, while Mr. Ricafort expects it to range from PHP 59.90 to PHP 60.40. — Aaron Michael C. Sy