The peso may continue to experience volatility this week as markets monitor developments between the United States and Iran, as well as domestic political issues.
On Friday, the currency strengthened by nine centavos to close at P61.515 per dollar from Thursday's P61.605, a positive outcome from the previous day's close.
However, when looking at the week as a whole, the peso declined by 10 centavos from its P61.415 close on July 3, indicating a drop in value.
The dollar-peso exchange rate closed lower on Friday but traded mostly sideways, tracking the dollar index, which fell following the resumption of peace talks despite continued attacks in the Middle East, according to a trader.
The peso was also supported by the downward correction of global crude oil prices, which provided a boost to the currency.
Oil prices eased from earlier highs, with US crude last down 2.65% to $71.57 a barrel and Brent at $75.72 per barrel, down 2.95% on the day, as concerns about higher inflation denting global growth outweighed supply worries.
The dollar index, which measures the greenback against a basket of currencies, shed 0.15% to 100.87, with the euro up 0.19% at $1.1436.
A series of attacks between the US and Iran over the past several days has led to President Donald J. Trump declaring the end of a ceasefire, though the door remains open for continued negotiations.
Locally, the peso gained support from positive developments in the Senate impeachment trial of Vice-President Sara Duterte-Carpio, which commenced last week.
The trial is tackling Article IV of the impeachment complaint, which accuses Ms. Duterte of grave threats against the President, First Lady Louise Araneta-Marcos and former Speaker Ferdinand Martin G. Romualdez.
For this week, the trader expects the foreign exchange market to take a wait-and-see stance amid intensifying tensions in the Middle East despite signs of continued negotiations.
Developments in the impeachment trial could provide Filipinos with clarity about the charges, which may support the peso, according to the trader.
Major catalysts for the global and local financial markets will be developments or any progress, or lack thereof, on the negotiations on a more permanent US-Iran peace deal until around August 17.
Players will also monitor a scheduled speech by US Federal Reserve Chair Kevin Warsh and the release of US consumer and producer inflation data.
The trader sees the peso trading within P61.40 to P61.70 against the greenback, while another economist expects it to move between P61.20 and P61.70.
