Peso climbs with US, Iran set to resume talks

THE PESO strengthened against the dollar on Monday after the United States and Iran agreed to stop the latest exchange of attacks and restart their peace talks.

The currency appreciated by 12 centavos to close at P61.17 versus the greenback from P61.29 on Friday, based on Bankers Association of the Philippines data posted on its website.

The local unit opened Monday’s session a shade weaker at P61.30 per dollar. It dropped to a low of P61.32, while its intraday best was at P61.125 against the greenback.

Dollars traded sank to $1.427 billion on Monday from $2.05 billion on Friday.

“The dollar-peso closed a bit lower most likely on improving risk sentiment on stalled US-Iran attacks ahead of peace talks,” a trader said in a phone interview.

“US and Iran agreed to stop retaliatory attacks before peace talks resume this week in Doha, Qatar…; as a result, global crude oil prices mostly corrected slightly higher but nevertheless still erased almost all of their increase since the war started more than four months ago,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. “Thus, the worst in global crude oil prices and resulting inflationary pressures could have been seen already and could still somewhat help reduce the country’s import bill, narrow the trade deficit, and also help ease inflationary pressures.”

For Tuesday, the trader sees the peso ranging from P61 to P61.40 against the dollar, while Mr. Ricafort expects it to move between P61.05 and P61.30.

The dollar was headed for its biggest monthly gain in nearly a year on Monday, supported by the growing chances of rate rises and optimism about the US economy, as investors watched developments in the Gulf ahead of a key jobs report later this week, Reuters reported.

The US and Iran traded fresh attacks over the weekend before they agreed to stop and meet in Qatar on Tuesday, leaving investors nervous about the declared ceasefire and nudging oil prices higher.

The euro edged up 0.2% to $1.1399 after reaching a 13-month low against the dollar last week; it was on track for a 2.4% monthly decline.

The dollar index, which tracks the performance of the US currency against six others, was steady at 101.34, near last week’s 13-month high. The dollar itself has risen against every major currency this month, performing the strongest against Scandinavian and Antipodean currencies, which have lost between 4.7% and 7%.

Rising inflationary pressures, together with a surprisingly hawkish debut from Federal Reserve Chair Kevin Warsh, have upended market expectations for rate cuts this year, while the artificial intelligence-driven boom in US equity markets has been attracting capital at breakneck speed.

As such, the dollar is heading for a 2.5% gain for June, its biggest monthly rise since July 2025. Weekly data from the US market regulator showed investors held their largest bullish position in the dollar relative to other major currencies since 2019, worth some $36.4 billion, according to LSEG data.

Later this week, the monthly US employment report could give investors a greater sense of how accurately markets are pricing the chances of Fed rate hikes this year. Right now, money markets show traders fully expect one rate hike this year, with a roughly 50% chance of a second.

The Japanese yen was at 161.83, unchanged on the day and around its lowest point in 40 years, while the Swiss franc strengthened modestly for a third day to 0.8092, not far off last week’s 11-month lows. — A.M.C. Sy with Reuters