THE PESO strengthened further on Tuesday after continued drop in global oil prices as well as prospects of a gradual reopening of some parts of the US economy.
The local unit ended trading at P50.67 against the dollar yesterday, gaining 2.5 centavos from its Monday finish of P50.695, according to data from the Bankers Association of the Philippines.
The peso opened the session at P50.69 per dollar. Its weakest was at P50.725 while its intraday best was at P50.66 against the greenback.
Dollars traded increased to $368.53 million on Tuesday from the $213.82 million on Monday.
The peso’s strength on Tuesday was fueled by another drop in oil prices, according to Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
“The peso closed stronger after the latest decline in global oil prices…that may lead to lower inflation,” he said in a text message.
Reuters reported that the oil price decline on Tuesday came amid rising concerns on dwindling crude storage capacity worldwide and fears that demand may only be revived slowly when countries ease restrictions to combat the pandemic.
Meanwhile, a trader said market optimism over a possible gradual resumption in economic activity in the US also boosted the peso.
“The peso appreciated as investors remain optimistic over prospects of loosening restrictions on businesses to gradually reopen the US economy,” the trader said in an e-mail.
Some state officials in the US have bared their initial steps to reopen their economy while continuing the battle against coronavirus disease 2019.
For today, Mr. Ricafort gave a forecast range of P50.55 to P50.75 while the trader sees the peso moving around the P50.60 to P50.80 levels. — L.W.T. Noble with Reuters