The peso further weakened against the US dollar on Thursday, following Russian retaliation against Ukraine’s US-backed longer-range missile attack and the anticipation of more profitable American firms under re-elected US President Donald Trump.

The local currency closed at P59 per dollar on Thursday, down from P58.91 on Wednesday, data from the Bankers Association of the Philippines showed.

The last time the peso hit the 59 level was September 2022.

The peso had been depreciating for three days straight as it opened at 58.93 on Thursday before reaching a high at 59 and a low at 58.92.

US currency as haven

Rizal Commercial Banking Corp. chief economist Michael Ricafort said investors sought more US dollars as a safe haven amid the escalating Russia-Ukraine war under outgoing US President Joe Biden.

Trump will be inaugurated as the new president on 20 January.

“Ukraine carried out its first strike with US missiles in Russia. Russia’s President Putin is open to talks on a ceasefire deal with Trump,” Ricafort shared.

BBC reported Russia responded through a British and French-made intercontinental ballistic missile at Ukraine, the first attack using that weapon after nearly three years.

Meanwhile, University of the Philippines economics professor Ramon Clarete said investors might be increasingly redirecting funds to the US as they expect more prosperous American firms under Trump.

“It possibly reflects an exit of portfolio investments as foreign investors adjust to a then business uncertainty of world finance under the Trump government,” he said.

Trump promised to cut corporate income tax to 15 percent from 21 percent and impose high tariffs on imported goods at 10 to 15 percent and up to 60 percent on Chinese goods.

He said these measures will boost production of US firms and generate more jobs for Americans.

For Friday, Ricafort projected the peso-US dollar exchange to settle within the range of 58.85 to 59.00.