The Philippine peso surged to a two-week high Thursday, a surprising ripple effect from an unexpected diplomatic turn in the world stage.
The currency closed at P59.16 against the US dollar, a significant jump from Wednesday’s P59.261, fueled by a sudden shift in market sentiment.
This marked the peso’s strongest performance since January 5th, a clear indication of renewed confidence after days of uncertainty.
Trading opened with the peso already showing strength at P59.18, and throughout the day it fluctuated between a high of P59.095 and a low of P59.23, ultimately solidifying its gains.
The volume of dollar transactions increased to $1.367 billion, reflecting heightened activity as investors reacted to the unfolding events.
The catalyst for this positive movement? A dramatic retreat by US President Donald Trump from threats of tariffs against European nations, initially made in pursuit of acquiring control of Greenland.
Trump’s initial threats had sent shockwaves through global markets, triggering a sell-off of US assets, but his subsequent announcement of a potential deal framework with NATO offered a crucial reprieve.
While details of the proposed agreement remain vague, the mere suggestion of de-escalation was enough to calm anxieties and bolster investor confidence.
Adding to the peso’s strength, President Ferdinand Marcos, Jr. publicly expressed a desire to prevent the exchange rate from reaching P60 to the dollar, signaling government support for a stable currency.
However, officials clarified that the central bank currently sees no need to intervene directly in the market, trusting the natural forces of supply and demand to maintain equilibrium.
Looking ahead, market analysts predict the peso will continue to trade within a narrow range, between P59 and P59.30, while others anticipate a slightly tighter band of P59.05 to P59.25.
The peso’s recent gains serve as a potent reminder of how interconnected global economics and even geopolitical ambitions can be, and how quickly market perceptions can shift.
