The Philippine peso weakened against the U.S. dollar on Monday as geopolitical tensions between the United States and Iran resurfaced, dampening hopes for a swift peace settlement.
Closing at 61.599 per dollar, the peso fell 8.4 centavos from Friday’s close of 61.515. The currency opened the session at 61.61, reached an intraday high of 61.56 and a low of 61.65.
Dollar holdings in the Philippines declined to $957.5 million from $1.43 billion the previous day.
A market trader noted that the peso’s modest gain mirrored a higher dollar index and rising crude prices amid the escalating Middle‑East conflict.
Rizal Commercial Banking Corp.’s chief economist attributed the dollar’s early strength to hawkish expectations for the U.S. Federal Reserve, elevated global oil prices, and ongoing U.S.–Iran clashes.
Looking ahead, the peso is expected to trade between 61.40 and 61.70 per dollar, while the chief economist projects a range of 61.50 to 61.70.
Global currency markets saw the dollar slip after earlier gains as investors focused on renewed Gulf hostilities; the yen also fell following reports that Japan will not adjust state pension fund allocations.
During the session, the euro rose 0.15% to $1.1433, the British pound remained flat at $1.339, and the Australian dollar slipped 0.1% to $0.694.
U.S. and Iranian forces exchanged missile and drone attacks over the weekend, with Tehran targeting U.S. facilities in the Gulf and temporarily closing the Strait of Hormuz, prompting Brent crude to climb 3% to $78.50 a barrel.
The dollar index briefly rose 0.3% before easing to 100.83, down 0.2% at the close.
Market analysts observed that the dollar’s earlier surge was driven by the conflict, but a more pronounced Fed outlook repricing may limit further gains if tensions persist.
Fed funds futures now imply roughly a 50% chance of two or more rate hikes by the December policy meeting, a slight increase from the prior day.
Inflation data will dominate the near term, with U.S. consumer price index figures slated for release on Tuesday, producer price index data the following day, and a Federal Reserve chair’s testimony before Congress later in the week.
