Peso may be range-bound as market awaits inflation report

THE PESO may be range-bound against the dollar this week as players await the release of Philippine inflation data and assess the possible policy implications of the nomination of a new US Federal Reserve chair.

On Friday, the local unit closed at P58.86 per dollar, rising by 8.5 centavos from its P58.945 finish on Thursday, data from the Bankers Association of the Philippines showed.

Week on week, the peso jumped by 23 centavos from its P59.09 close on Jan. 23.

“The dollar-peso closed lower but traded mostly sideways, touching the P59 high amid selling on peso weakness due to lower-than-expected GDP (gross domestic product) figures,” a trader said in a phone interview, adding that there was profit taking in the afternoon session.

Philippine GDP growth slowed to 3% in the fourth quarter of 2025, bringing the full-year average to 4.4%, missing government’s 5.5%-6.5% goal.

The soft growth data raise the odds of a rate cut by the Bangko Sentral ng Pilipinas (BSP) at the Monetary Board’s Feb. 19 meeting, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The Monetary Board has reduced benchmark rates by a cumulative 200 basis points since its easing cycle began in August 2024, bringing the policy rate to an over three-year low of 4.5%.

For this week, the trader said the peso will move sideways as players await the release of January Philippine inflation data on Thursday (Feb. 5) and developments following US President Donald J. Trump’s announcement of his Fed chair pick.

The market will also monitor US economic data, the trader added.

The trader sees the peso moving between P58.80 and P59.10 per dollar this week, while Mr Ricafort said it may range from P58.65 to P59.15.

The choice of Kevin Warsh to lead the US Federal Reserve clears uncertainty on Wall Street about the central bank’s likely next chair, but leaves investors weighing how the former Fed governor’s past hawkish leanings will mesh with Mr. Trump’s insistence on far lower interest rates, Reuters reported.

Mr. Warsh, whom Mr. Trump nominated on Friday to lead the US central bank, ending a months-long process, had been one of four candidates widely tipped as potential successors to Jerome H. Powell, whose term as chair ends in May. A proponent of tighter monetary policy as a Fed governor from 2006 to 2011, Mr. Warsh said recently that Mr. Trump is right to press for interest rate cuts. — A.M.C. Sy with Reuters