THE PESO strengthened versus the greenback on Tuesday amid bullish sentiment on improving foreign direct investments (FDIs).
The local unit closed at P51.14 per dollar on Tuesday, appreciating by 17 centavos from its P51.31 finish on Monday, based on data from the Bankers Association of the Philippines.
The peso opened Tuesday’s session stronger at P51.25 versus the dollar. Its weakest showing was at P51.275, while its intraday best was at P51.07 against the greenback.
Dollars exchanged rose to $1.221 billion on Tuesday from $919.22 million on Monday.
The peso strengthened on the back of higher FDIs, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Central bank data released on Monday showed FDI inflows surged by 98.9% year on year to $855 million in October from $430 million. FDIs in the first 10 months of 2021 increased by 48.1% to $8.1 billion from the same period of 2020.
Meanwhile, a trader attributed the peso’s strength to positive market sentiment as oil prices declined “following the normalization of the political situation in Kazakhstan and resumption of oil production in Libya.”
Reuters reported that Brent crude dropped 1.1% to $80.87 per barrel on Monday, while US West Texas Intermediate (US WTI) crude declined 0.9% to $78.23 a barrel. However, by Tuesday, Brent crude futures inched up by 0.7% to $81.47, while US WTI increased $78.91.
Last week, oil prices rose by 5% after protests in Kazakhstan which caused disruption in train lines and hit production at the country’s Tengiz oilfield, while pipeline maintenance in Libya caused production to decline to 729,000 barrels per day from a high of 1.3 million bpd last year.
For Wednesday, Mr. Ricafort expects the local unit to move within P51.05 to P51.25, while the trader gave a forecast range of P51.05 to P51.30. — L.W.T. Noble with Reuters
