Peso gains more ground vs US dollar: Hold remittance?

Manila: The Philippine peso traded at ₱57.2150 against the US dollar on Thursday (April 3, 2025) amid uncertainty over the knock-on effects of the tariff tit-for-tat move by the Trump administration.

The local currency has further strengthened this month.

Bangko Sentral ng Pilipinas (BSP) data shows that the peso has averaged ₱57.248 in the first 3 days of April, up from ₱57.425 average recorded in March, and ₱58.695 recorded in November 2024.

Analysts became bullish on a basket of Asian currencies as traders pulled back from previous bullish bets on the greenback.

When the peso rises, Overseas Filipino Workers (OFWs) sending money home get fewer pesos for the same amount of foreign currency, reducing the purchasing power of their families in the Philippines.

On the flip side, OFWs planning to return to the Philippines or invest in local assets may benefit from a stronger peso. A higher peso value makes imported goods cheaper, lowers inflation, and can reduce the cost of foreign debt, which could positively impact the economy.

For the first time since early October, analysts have turned bullish on the Philippine peso, with long positions reaching their highest level in over three months.

Analysts have turned bullish on the Philippine Peso as the dollar has weakened.

The shift comes as currency markets adjust to weakening confidence in the US dollar. 

Traders had initially expected President Donald Trump’s policies to strengthen the dollar, but concerns over his aggressive tariff agenda and its potential impact on economic growth have weighed on sentiment.

The dollar index, which measures the currency against six major rivals, has declined 5.02 per cent year to date as of April 3, according to Market Watch. 

After hitting a two-year peak of 110.17 in mid-January, the index stood at 103.073 as of 4:17 GMT, struggling to rebound.

Trade tensions have further escalates as reciprocal tariffs kicked in on Wednesday (April 2), and threaten economic growth and trade.

Despite concerns over President Trump's tariff policies, forex strategists expect the US dollar to hold steady in the coming months.

However, its "safe-haven" status has come into question, a Reuters survey shows.

More than one-third of forex strategists worry that the dollar’s traditional role as a “safe haven” is eroding due to US isolationist policies.

New tariffs, which took effect on Wednesday (April 2), are adding to concerns in currency markets, with traders pulling back from previous bullish dollar bets.

As a result, traders have flipped from near-decade high long bets on the dollar to net short for the first time since October, influenced by expectations of more Federal Reserve rate cuts.

The survey also showed no clear consensus on dollar positioning by the end of April, marking a shift from previous bullish sentiment.

Some forex strategists fear Trump’s policies could accelerate a shift away from the dollar as the dominant global currency, though major shift is unlikely in the short term.