The Philippine peso sank to a 17-month low versus the dollar on Tuesday amid rising geopolitical risks and the tension in the Middle East, compounded by economic indicators from the United States.

Data from the Bankers Association of the Philippines showed the local unit breached P57 against the greenback, weaker by P0.192 or 3 percent from its P56.808 finish on Monday. This was the peso’s weakest close since its P57.375-per-dollar rate on 22 November 2022.

The local currency opened the day down at P56.85 compared to P56.65 on Monday. It traded between P57.00 and P56.85. The average level for the day stood at P56.971. Volume declined to $1.100 billion on Tuesday from $1.589 billion last Friday.

In a Viber message, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the local unit closed weaker after top Israeli military officials signaled a possible retaliation to Iran’s weekend drone and missile attack on Israel that was foiled.

He said the peso weakened on the back of better-than-expected US retail sales data that could reduce the urgency to cut Fed rates and the latest hawkish signals from Fed officials.

“(The peso also weakened) after the latest hawkish local signals that would delay any local policy rate cut to (the first quarter of) 2025 and monetary policy that would remain tight for the meantime,” he added.