Home Banking & Finance Peso drops vs dollar on oil prices

Peso drops vs dollar on oil prices

THE peso dropped versus the dollar on Monday due to higher global oil prices seen last week. — BW FILE PHOTO

THE PESO weakened against the greenback on Monday as market sentiment took a hit from higher global oil prices seen last week after hackers shut down a major US pipeline.

The local unit finished trading at P47.855 per dollar on Monday, shedding 4.5 centavos from its previous finish of P47.81 against the greenback.

The peso opened Monday’s session at P47.80 per dollar, which was also its intraday best. Meanwhile, its weakest showing for the day was at P47.865 versus the greenback.

Dollars traded dropped to $567.19 million on Monday from $634.3 million on Friday.

The peso retreated versus the dollar due to higher global oil prices, which could increase the oil import bill of the Philippines and affect the local currency, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

Reuters reported that oil prices inched higher on Friday following Thursday declines. Brent crude oil futures rose 2.3% to $68.60 per barrel by 12:58 p.m. ET while West Texas Intermediate crude rose by $1.45 to $65.27.

On Monday, however, oil prices marked time after seesawing last week as the Colonial Pipeline restarted from a hacker shutdown.

Brent dipped 8 cents to $68.63 a barrel, while US crude lost 2 cents to $65.35 per barrel.

The dollar tracked the move in US yields, bouncing to 90.909 on a basket of currencies before steadying at its current 90.407.

Meanwhile, a trader attributed the peso’s weakness to preference for the dollar following release of key economic data abroad.

“The peso depreciated as global optimism dimmed following the weaker-than-expected Chinese retail sales report,” the trader said in an e-mail.

Chinese retail sales rose 17.7% in April on a year ago, short of forecasts for a jump of 24.9%, while industrial output matched expectations with a rise of 9.8%. The data, along with global inflation concerns, caused Asian markets to end mixed on Monday.

For Tuesday, Mr. Ricafort gave a forecast range of P47.80 to P47.90 per dollar, while the trader expects the peso to move within the P47.80 to P48 levels against the greenback. — LWTN with Reuters