Peso Plunges to Record Low Amid Fed Hike Expectations

The peso's value plummeted to a new record low of P62.59 against the dollar on Friday, surpassing its previous record of P62.565 seen on September 2. The currency has been declining steadily since December last year, with a year-to-date loss of 6.07%.

The drop was largely due to stronger-than-expected US labor data, which bolstered expectations of a hawkish Federal Reserve. The US nonfarm payrolls surged by 162,000 jobs in August, the largest gain in five months, while the unemployment rate remained steady at 4.1%.

Financial markets are now pricing in a roughly 62% chance of a quarter-percentage-point rate hike at the Fed's September meeting, up from about 49% on Wednesday. The peso is expected to continue its decline, with some analysts predicting it could retest its historic intraday low of P62.69.