Peso back at P59 level on Iran deal hopes
THE PESO rose against the dollar on Tuesday, returning to the P59 level on market optimism over a potential resolution to the Middle East war even as weekend peace talks ended without a deal.
The local unit appreciated by 26.5 centavos to close at P59.87 against the greenback from its P60.135 finish on Monday, data from the Bankers Association of the Philippines showed.
The currency opened Tuesday’s session sharply stronger at P59.888 per dollar. It traded at the P59 level the entire day, logging an intraday best of P59.74 and reaching a low of just P59.93 against the greenback.
Dollars traded climbed to $2.007 billion from $1.89 billion on Friday.
“The dollar-peso returned to the P59 level amid improved risk sentiment due to optimism on US-Iran talks,” a trader said by phone.
Lower global crude oil prices also supported the local unit, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Wednesday, the first trader sees the peso ranging from P59.50 to P60 per dollar, while Mr. Ricafort expects it to move between P59.75 and P60.
The safe-haven dollar inched lower toward a seventh straight daily decline on Tuesday as investors hoped for a diplomatic breakthrough in the Middle East even as the US military began a blockade of Iran’s ports, Reuters reported.
The dollar index, which measures the dollar against a basket of six currencies, was last down 0.09% at 98.25, trading around its weakest since March 2, the first trading day after the US-Israeli war with Iran began.
Negotiating teams from the US and Iran could return to Islamabad later this week, five sources said on Tuesday, after the highest-level talks between the two countries in decades ended at the weekend without a breakthrough.
US President Donald J. Trump said Iran had been in touch on Monday and wanted to make a deal but that he would not sanction any agreement allowing Tehran to have a nuclear weapon.
The US military’s blockade of Iran’s ports angered Tehran and added to uncertainty about whether the Strait of Hormuz could be reopened.
The closure of the narrow strait, used for shipping much of the world’s oil and gas, has propelled dollar-denominated oil prices higher, which has underpinned dollar moves. — Aaron Michael C. Sy with Reuters
