The Philippine peso tumbled to a new low on Tuesday, breaching the P59-per-dollar mark as anxieties flared over escalating global trade tensions. A sudden threat of increased tariffs from the US President sent ripples through the foreign exchange market, immediately impacting the peso’s value.
The currency closed at P59.085 against the dollar, a significant weakening from the previous day’s P58.971. Trading opened with the peso already under pressure at P59.05, fluctuating throughout the day between P59.035 and a concerning high of P59.10.
Market reaction was swift and decisive, triggered by the US President’s announcement of potential tariffs on South Korean automobiles and other imports. The move stemmed from accusations that South Korea was delaying the full implementation of a trade agreement reached the previous year.
South Korea responded urgently, attempting to reassure the US of its commitment to the deal, emphasizing ongoing efforts to finalize the necessary steps for ratification. The situation highlights a pattern of disruptive trade policies enacted since 2025, characterized by threats and shifting stances.
Adding to the peso’s woes, a surprisingly robust US durable goods report signaled continued strength in American consumer spending. This indicated a potentially more aggressive monetary policy from the US Federal Reserve, further bolstering the dollar’s position.
Analysts predict continued volatility for the peso in the coming days. Expectations are mounting that the US Federal Reserve will maintain its current interest rates at its upcoming policy meeting, potentially fueling further depreciation.
Looking ahead to Wednesday, forecasts suggest the peso could test the P58.90 to P59.10 range, with some analysts anticipating a potential slide to P59 to P59.25 against the dollar. The market remains highly sensitive to developments in US trade policy and economic data.
Trading volume increased significantly, reaching $1 billion – a jump from the $954 million recorded on Monday. This surge in activity underscores the heightened level of concern and repositioning within the currency market.
