Peso to weaken toward year-end

The Philippine peso is expected to lose more value against the dollar toward the end of the year despite the country’s strong macroeconomic fundamentals as an improving United States economy continues to enhance the dollar’s attractiveness to investors.

Although the local currency may show continued firmness in the near term as a strong current accounts surplus and brisk domestic production sustain the momentum from the recent upgrade of the country’s sovereign rating by the Standard & Poor’s, analysts also see some external and domestic factors that could threaten the peso’s strength later in the year.