Peso may stay above P60 on prolonged Iran conflict

THE PESO could hold above the P60 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 P60.16 against the greenback from its all-time-low P60.748 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 P60.55 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 P60 and P60.50 per dollar this week, while Mr. Ricafort expects it to range from P59.90 to P60.40. — Aaron Michael C. Sy