The Philippine peso has remained resilient against market volatility triggered by the United States’ new tariff policy.
The peso closed at 57.31 against the US dollar on Tuesday, up nearly 1 percent from the start of trading in January 2025. It also strengthened from Monday’s close of 57.43.
Fitch Ratings noted that most major economies’ currencies have appreciated against the dollar since the beginning of 2025, despite the significant increase in US tariffs.
The ratings agency said developed market currencies, excluding the Australian dollar, had appreciated by an average of 4.5 percent since the end of 2024. It said market participants appeared more concerned about the negative impact of tariff hikes on US growth than the prospect of a narrower trade deficit, which had a more pronounced effect on the dollar’s value.
Emerging market currencies showed more varied movements, with substantial gains for the Russian rouble (around 30 percent), the Brazilian real, and the Polish zloty, but weakening for the Turkish lira and the Indonesian rupiah.
Since January 2023, the yen has depreciated by 12 percent against the dollar, while the euro and the Swiss franc have strengthened by 2.7 percent and 7 percent, respectively.
Among emerging markets, the number of Turkish lira per dollar has roughly doubled, while the Korean won and rupiah have depreciated by 15 percent and 7.5 percent, respectively.
Nominal effective exchange rates (NEER), which represent averages of bilateral rates weighted by countries’ trade patterns, show that the U.S. dollar NEER remains near a multi-decade high. This is despite recent dollar weakness, following a steady appreciation between 2015 and 2024, Fitch said.
Switzerland’s NEER is close to an all-time high, while the euro NEER has slightly decreased from its record high in the summer of 2024.
The NEERs of Japan and the UK are significantly lower than in 2000, at 26.5 percent and 15.8 percent respectively. China and Poland are the only countries among the Fitch-20 emerging market economies where the NEER has appreciated since 2000.
