Peso to rise as Fed woes drag dollar

THE PHILIPPINE PESO is expected to end the year stronger against the US dollar as the greenback remains under pressure due to US President Donald J. Trump’s continued attacks against the US Federal Reserve.

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MUFG Global Markets Research said they expect the peso to rise to the P56 level in the coming months as global investors remain bearish on the US dollar.

“We have adjusted our PHP forecast slightly stronger and see USD/PHP moving towards the P56 levels (from P56.50 levels previously). The key reason for the forecast change is mainly global rather than local, with our G10 team now seeing more US dollar weakness with increasing concerns around President Trump’s attack on Fed independence,” it said in its Foreign Exchange Outlook report for September.

On Tuesday, the peso closed at P57.51 versus the dollar, plunging by 35 centavos from Monday’s finish of P57.16. This was its worst showing in nearly a month or since it ended at P57.63 against the greenback on Aug. 5.

Year to date, the local unit is still up by 33.5 centavos or 0.58% from its end-2024 close of P57.845.

According to its latest forecasts, the research firm expects the peso to close this quarter at P57 versus the dollar and strengthen further to end 2025 at P56.50. It sees the local unit then rising to P56 against the greenback in the first half of 2026.

MUFG Global Markets Research said concerns over the Fed will continue to be a key focus for investors.

"The decision of President Trump on Aug. 25 to fire Fed Governor Lisa Cook has dramatically escalated the risks associated with threats to Fed independence...