THE PESO rebounded against the dollar on Wednesday amid easing trade tensions between the United States and the European Union (EU).
The local unit closed at P55.475 versus the dollar, strengthening by 8.5 centavos from its P55.56 finish on Tuesday, Bankers Association of the Philippines data showed.
The peso opened Wednesday’s session almost flat at P55.55 against the dollar. Its worst showing was at P55.64, while its intraday best was its closing level of P55.475 versus the greenback.
Dollars exchanged went down to $1.8 billion on Wednesday from $1.9 billion on Tuesday.
“Initially, the pair went to a high of P55.64, tracking the dollar’s recovery following easing trade tensions overnight. But some defensive trading ahead of the Federal Open Market Committee minutes pushed the pair to a low of P55.475,” a trader said in a phone interview.
The dollar was firmer on Wednesday but remained under pressure as the US and EU continue their trade negotiations, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Thursday, the trader expects the peso to move between P55.30 and P55.70 per dollar, while Mr. Ricafort sees it ranging from P55.35 to P55.55.
Japan’s yen was steady on Wednesday as ructions in the bond market kept the spotlight on the fiscal health of major economies, while the dollar was firm due to upbeat consumer confidence data and hopes for more US trade deals, Reuters reported.
The yen slid slightly at 144.14 per dollar after dropping 1% on Tuesday following a report by Reuters that Japan will consider trimming issuance of super-long bonds after a sharp rise in yields in recent weeks.
The yen has gained nearly 9% so far in 2025 due to broad dollar weakness and safe-haven flows as investors flee US assets in the wake of the erratic trade policies under President Donald J. Trump that have roiled markets.
The dollar index, which measures the US currency against six rivals, was last 0.08% higher at 99.608 but is down 8% for the year as investors look for alternatives to US assets.
The euro was broadly flat at $1.1321 after dropping 0.5% on Tuesday as a bout of dollar buying swept the markets amid signs of possible trade deals and data showing US consumer confidence in May was much better-than-expected.
Still, new orders for key US-manufactured capital goods plunged by the most in six months in April as the flip-flopping tariff salvos take a toll on the economy and businesses, data showed on Tuesday.
“More positive data surprises are needed to rebuild confidence in US growth, and deficit worries aren’t disappearing anytime soon,” ING FX strategist Francesco Pesole wrote in a note.
“When adding the themes of de-dollarization and Trump’s plans for a weaker dollar in the longer run, we still think the greenback rallies can fade from here.”
The dollar was also supported by Mr. Trump’s decision to delay higher tariffs on the European Union over the weekend.
EU officials have asked the bloc’s leading companies and chief executive officers for details of their US investment plans, two sources familiar with the matter told Reuters, as Brussels prepares to advance trade talks with Washington.
Sterling last bought $1.3504 but stayed close to the three-year high touched on Monday.
Investors will watch out for the April personal consumption expenditures report — the Federal Reserve’s preferred inflation gauge — on Friday that could help gauge the impact of Mr. Trump’s trade policies. — Aaron Michael C. Sy with Reuters
