THE PESO rebounded slightly against the dollar on Tuesday, with US President-elect Donald J. Trump’s administration’s planned tariff policies in focus.
The local unit closed at P58.62 per dollar on Tuesday, strengthening by eight centavos from its P58.70 finish on Monday, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s trading session stronger at P58.60 against the dollar. It climbed to as high as P58.47, while its intraday low was its closing level of P58.62 versus the greenback.
Dollars exchanged rose to $1.42 billion on Tuesday from $1.35 billion on Monday.
The peso was supported by a report that said Mr. Trump’s economic team is studying a slower increase in tariffs, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The peso appreciated following news that the incoming Trump administration may consider a gradual increase of tariffs rather than a one-time major imposition of tariffs. This has somehow eased potential inflationary concerns from higher tariffs,” a trader likewise said in an e-mail.
For Wednesday, the trader said the peso could weaken on expectations of faster US inflation.
The trader said the peso may move between P58.50 and P58.75 per dollar on Wednesday, while Mr. Ricafort expects it to range from P58.50 to P58.70.
The dollar hovered near its highest level in more than two years on Tuesday as traders scaled back bets on US rate cuts in 2025 after strong economic data, Reuters reported.
With Mr. Trump set to step back into the White House next week, the focus has been on his policies which analysts expect will boost growth but add to price pressures.
The threat of tariffs along with the Federal Reserve’s stated measured approach to rate cuts this year has lifted Treasury yields and the dollar, putting the euro, pound, yen and yuan under pressure.
However, on Tuesday, market focus returned to the chance that US tariffs may be raised gradually, after a media report suggesting the US could take a measured approach.
The dollar index, which measures the US currency versus six other units, was 0.05% higher at 109.44, not far from the 26-month high of 110.17 it reached on Monday. — A.M.C. Sy with Reuters