Peso tumbles to over three-week low

THE PESO tumbled to an over three-week low on Wednesday as demand for the dollar was fueled by hawkish US Federal Reserve expectations and continued uncertainty over the Middle East war.

The currency fell by 26.1 centavos to finish at P61.621 versus the greenback from P61.36 on Tuesday, based on Bankers Association of the Philippines data posted on its website.

This was its weakest close in more than three weeks or since ending at P61.69 on June 8.

The local unit opened Wednesday’s session significantly weaker at P61.55 per dollar, which was already its intraday best. Meanwhile, its worst showing was at P61.65 against the greenback.

Dollars traded went down to $1.575 billion on Wednesday from $1.629 billion on Tuesday.

“The dollar-peso closed higher after US JOLTS data released overnight supported hawkish Fed bets, alongside safe-haven demand amid uncertainty surrounding the US-Iran peace deal,” a trader said by phone.

The local unit dropped along with other regional currencies as the Japanese yen sank to new lows, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Thursday, Mr. Ricafort expects the peso to range from P61.50 to P61.70 against the dollar.

Meanwhile, the trader said the market will monitor the release of more US labor data.

“The expectation is a bit lower, but a better than expected reading may further fuel expectations of a Fed rate hike this year to push the pair to retest the P61.75-per-dollar level. On the flipside, we see immediate support at P61.10.”

The dollar hit a 40-year high against the yen on Wednesday as a sharp rise in US Treasury yields boosted the currency ahead of US jobs data that could strengthen the case for a Federal Reserve rate hike this month, Reuters reported.

The dollar rose as high as ¥162.84, well above levels that prompted Japanese authorities to intervene a few weeks ago to support the struggling currency. It was last at ¥162.71 yen, up 0.1% on the day.

Ahead of Thursday’s nonfarm payrolls report, data overnight showed US job openings rose to a two-year high in May, though sluggish hiring weighed on consumers’ perceptions of the labor market.

Job openings, a measure of labor demand, had increased 9,000 to 7.594 million by the last day of May, the highest level since May 2024, the Labor Department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report. Economists polled by Reuters had forecast 7.30 million vacancies in May. But some economists said the JOLTS report should be treated with caution, noting the response rate to the survey was very low.

Traders now see a 67% chance of a Fed rate hike in September, up from 20.5% a month ago, according to the CME FedWatch tool. — A.M.C. Sy with Reuters