Peso falls to P63.25 against dollar as US inflation fuels demand

Detailed summary

The Philippine peso weakened against the US dollar on Wednesday as faster-than-expected inflation in the United States boosted demand for the greenback.

The Philippine peso weakened against the US dollar on Wednesday as faster-than-expected inflation in the United States boosted demand for the greenback.

The local currency shed 34 centavos to close at P63.25 against the dollar, from P62.91 on Tuesday.

Rizal Commercial Banking Corp. chief economist Michael Ricafort attributed the peso's depreciation to higher-than-expected US inflation, which raised expectations of further interest rate hikes by the US Federal Reserve.

The latest US consumer price index (CPI) data raised the estimated probability of a 0.25-percentage-point Fed rate hike at its next policy meeting on Dec. 9, 2026, to 112%, Ricafort said. He also cited expectations of three additional 0.25-percentage-point rate hikes by June 2027, amid hawkish statements from some Fed officials.

Data from the US Bureau of Labor Statistics showed that inflation rose by 0.4%, exceeding economists' forecast of 0.3%.

Despite the peso's weakness, Ricafort said global crude oil prices remained among the key indicators influencing the local currency's movement against the dollar.

He added that lower oil prices could help support the peso, along with expected dollar-to-peso conversions by overseas Filipino workers (OFWs) for Christmas spending and by exporters, business process outsourcing (BPO) firms and other dollar-earning institutions to fund Christmas bonuses and 13th-month pay from November to December.— MCG, GMA News

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