The peso may be tied to a range as investors remain cautious amid Middle East tensions

The PESO may break away from the dollar this week as investors remain cautious as the conflict continues in the Middle East as the US presidential election approaches.

The local unit closed at P57.511 per dollar on Friday, strengthening by 28.9 centavos from its close of P57.80 on Thursday, data from the Bankers Association of the Philippines showed.

However, week-to-week, the peso fell by 30.6 centavos from its close of P57.205 on Oct. 11.

The peso rebounded against the dollar on Friday on data showing slower-than-expected economic growth in China and after the Chinese government revealed more details about its stimulus measures, a trader said by telephone.

China’s economy grew at its slowest pace since the start of 2023 in the third quarter, and although consumption and industrial output figures beat forecasts last month the slumping construction sector remains a major challenge for Beijing as it scrambles to revive growth, Reuters reported.

Authorities have significantly increased policy stimulus since late September, but markets are waiting for more details on the size of the package and a clear road map to return the economy to a long-term stable position.

The world’s second-largest economy grew 4.6% in July-September, official data showed, a touch above the 4.5% forecast in a Reuters poll but below the 4.7% pace in the second quarter.

Officials speaking at a post-data press conference on Friday expressed confidence that the economy could meet the government’s full-year growth targets of around 5%, supported by more policy support and further reductions in the amount of money banks must hold.

Quarterly, the economy grew by 0.9% in the third quarter, compared with a revised 0.5% growth in April-June, and below the forecast of less than 1.%.

China has been facing inflationary pressures since the beginning of last year, and some economists see those problems deepening.

Policy makers, who have been relying on infrastructure and manufacturing investment to drive growth, are committed to a shift towards consumption promotion.

The central bank in late September announced the most aggressive funding measures since the COVID-19 pandemic to support real estate and stock markets.

The peso was also supported by the US calling for a ceasefire after the death of one of the Hamas leaders, a trader said.

Easing tensions in the Middle East also led to lower crude oil prices, which helped boost the peso, Rizal Commercial Banking Corp. economist said. Michael L. Ricafort said in a Viber message.

This week, the trader said the peso could trade depending on what happens in the Middle East.

An Israeli airstrike that hit several houses and a multi-story building in the northern Gaza city of Beit Lahiya on Saturday caused dozens of casualties, doctors and officials said, as rescue operations continued, Reuters reported.

The Hamas press office said at least 73 people were killed in the strike. No official figures of casualties were immediately available from the health authorities but Medway Abbas, the chief executive of the health department, said the figures were accurate.

However, the local unit may weaken if Donald J. Trump wins the US presidency and rises, the trader added.

Opinion polls show a possible tie between Mr. Trump and Vice President Kamala Harris in the Nov. 5. However, different opportunities in Polymarket, as Mr. Harris at 40%, Reuters reports.

The peso’s movements may also be affected by the US Federal Reserve’s Beige Book report to be released on Wednesday (Oct. 23), Mr. Ricafort said.

The trader sees the peso moving between P57.40 and P57.70 per dollar this week, while Mr. Ricafort expects it to go from P57.20 to P57.60. – AMC Sy with Reuters