Written and reviewed by Kevin Nerway · Last verified 25 September 2026
Key Takeaways
- USD/PHP Repricing: The Philippine peso fell 15 centavos to close at P62.735 per US dollar on Thursday, September 24, 2026, reversing Wednesday's two-week high of P62.585.
- US Yield Spike: Strong US Purchasing Managers' Index (PMI) data and a weak 5-year Treasury auction drove 5-year yields above 5% for the first time since 2007.
- Hawkish Fed Guidance: Comments from Federal Reserve Governor Michael Barr led traders to price in a potential second consecutive interest rate hike next month, boosting the US Dollar Index to 101.08.
- Domestic Growth Cuts: S&P Global Ratings and the Asian Development Bank slashed 2026 Philippine GDP growth projections to 2.9% and 3.3% respectively, following a sluggish 2.3% Q2 expansion.
Peso Slips to P62.735 as US Dollar Index Touches 101.08
On Thursday, September 24, 2026, during Asian trading, the Philippine peso weakened by 15 centavos against the dollar to close at P62.735, according to data from the Bankers Association of the Philippines. This selloff effectively wiped out the gains from Wednesday's session, when the peso had reached a two-week high of P62.585.
The currency opened lower at P62.70 per dollar—which marked its strongest level of the session—before sliding to an intraday low of P62.795. Total trading volume contracted significantly, dropping to $1.145 billion from $1.636 billion recorded on Wednesday, signaling cautious positioning among market participants.
This currency move was driven primarily by global macro forces. At PropFirmScan, our desk observed broad dollar demand after strong US economic figures triggered a aggressive repricing of short-term interest rates. The US Dollar Index (DXY), which tracks the greenback against a basket of major trading partners, maintained a two-month high of 101.08. The Euro slumped toward a two-month low of $1.1384, while Sterling hovered near a three-month low of $1.324. Traders conducting order flow analysis of dollar pairs will note that emerging market currencies faced immediate liquidity drains as US yields surged.
US Treasury Yield Shock and Fed Guidance Drive Macro Repricing
The fundamental catalyst for this session's dollar surge was a stronger-than-expected US Purchasing Managers' Index (PMI) report, which reignited underlying inflation concerns across fixed-income desks. The data release was compounded by a poorly received auction of 5-year US Treasury notes, which sparked widespread bond market selling and pushed 5-year yields above 5% for the first time since 2007.
Adding further momentum to dollar bulls, Federal Reserve Governor Michael Barr stated on Wednesday that the backdrop of persistent inflationary risks and resilient economic growth warrants additional monetary tightening. Markets interpreted his remarks as forward guidance, prompting traders to build exposure toward a second consecutive Fed rate hike next month. Combined with elevated crude oil prices caused by heightened tensions in the Middle East, high energy import costs continue to weigh on net-energy-importing nations across emerging markets.
S&P Global and ADB Growth Cuts Add Local Headwinds
Beyond foreign exchange dynamic shocks from Washington, local macroeconomic fundamentals weighed heavily on the peso. Rating agencies and multilateral lenders revised their growth expectations downward for the domestic economy:
- S&P Global Ratings: Cut its 2026 Philippine gross domestic product (GDP) growth forecast to 2.9%, down sharply from its previous projection of 4.1%.
- Asian Development Bank (ADB): Trimmed its growth estimate to 3.3%, down from the 3.8% forecast published in July.
- Official Targets: Official Development Budget Coordination Committee (DBCC) targets call for 3.5% to 4.5% GDP expansion this year.
These downgrades follow government data showing second-quarter GDP grew by just 2.3% year-over-year—the slowest quarterly expansion since the COVID-19 pandemic—bringing first-half economic growth to 2.6%. The economic deceleration makes it harder for the local central bank to raise domestic borrowing costs without further dampening growth, creating a classic policy divergence trade.
Market expectations for Friday's trading session remain defensive. Bank traders project the peso to trade between P62.55 and P62.85 against the dollar, while economists at Rizal Commercial Banking Corp. project a range between P62.60 and P62.80. Traders applying fundamental analysis must factor in how economic growth downgrades constrain local central bank policy options.
Market Impact Snapshot
| Asset | Direction | Confidence |
|---|---|---|
| US Dollar Index (DXY) | Bullish | High |
| US 5-Year Treasury Yields | Bullish | High |
| Philippine Peso (USD/PHP) | Bearish | High |
| EUR/USD | Bearish | Medium |
| GBP/USD | Bearish | Medium |
Risk Management and News Execution Strategy for Funded Accounts
For prop firm traders evaluating market exposure during rate-driven events, volatility spikes like these underscore the importance of disciplined execution. Sudden shifts in global yield curves can trigger rapid margin expansion and wide bid-ask spreads across FX pairs.
When trading high-impact economic developments, keeping tight control over standard risk parameters is critical:
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Frequently Asked Questions
What caused the Philippine Peso to fall to P62.735 on September 24, 2026
The peso weakened by 15 centavos due to a combination of strong US PMI data, rising 5-year US Treasury yields above 5%, and hawkish comments from Fed Governor Michael Barr. Additionally, economic growth forecast cuts by S&P Global Ratings and the Asian Development Bank put pressure on the local currency.
How did US Treasury yields impact global currency markets during this session
The auction of 5-year US Treasury notes met weak demand, sending yields above 5% for the first time since 2007. This yield spike strengthened the US Dollar Index to 101.08 and pushed major currencies like the Euro and Sterling toward multi-month lows.
What are the updated Philippine GDP growth forecasts for 2026
S&P Global Ratings lowered its 2026 Philippine GDP growth estimate to 2.9% from 4.1%, while the Asian Development Bank reduced its forecast to 3.3% from 3.8%. These revisions follow second-quarter growth of 2.3%, which was the slowest expansion since the pandemic.
What trading range is expected for USD/PHP in upcoming sessions
Market participants expect USD/PHP to trade within a range of P62.55 to P62.85 in near-term sessions. Economists at Rizal Commercial Banking Corp. project a slightly narrower band of P62.60 to P62.80 as markets digest Fed policy expectations and high oil prices.