THE PESO rebounded versus the greenback on Wednesday amid a correction in global oil prices and gains in the local stock market.

The local unit closed at P51.34 per dollar on Wednesday, appreciating by 16 centavos from its P51.50 finish on Tuesday, based on data from the Bankers Association of the Philippines.

The peso opened Wednesday’s session stronger at P51.43 versus the dollar. Its weakest showing was at P51.445, while its intraday best was at P51.32 against the greenback.

Dollars exchanged dropped to $992.1 million on Wednesday from $1.005 billion on Tuesday.

The peso closed stronger following a decline in international oil prices following a reported resumption of the US and Iran’s negotiations on a nuclear deal, a trader said in a Viber message.

Reuters reported that oil prices decreased for a third session on Wednesday. Brent crude futures slipped by 8 cents or 0.1% to $90.70 a barrel by 0825 GMT, while US West Texas Intermediate crude declined by 0.2% or 18 cents to $89.18 a barrel.

Both contracts dropped by about 2% on Tuesday as Washington renewed indirect talks with Iran to revive a nuclear deal which could lift US sanctions on Iranian oil and in turn boost supply.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message said the peso appreciated on upbeat sentiment due to gains in the local stock market. The benchmark Philippine Stock Exchange index gained 44.25 points or 0.59% to close at 7,502.48 on Wednesday. The broader all shares index likewise increased by 22.40 or 0.57% to 3,951.58.

For Thursday, Mr. Ricafort gave a forecast range of P51.25 to P51.45 versus the dollar, while the trader expects the local unit to move within P51.25 to P51.50.

Meanwhile, the dollar stayed in a holding pattern on Wednesday, a day before the release of US consumer price data that may offer new clues on the pace of Federal Reserve policy tightening.

The dollar index — which gauges the greenback against six major peers, including Europe’s single currency — was also little changed at 95.587, after bouncing off a 2-1/2-week low of 95.136 reached Friday. It touched the highest since June 2020 at 97.441 at the end of last month.

The dollar index is “in a holding pattern while markets weigh up the prospect of an abrupt Fed policy tightening against the ECB’s (European Central Bank) hawkish backflip,” Westpac strategists wrote in a client note.

The dollar briefly touched a one-month high versus the yen on Wednesday, boosted by a climb in Treasury yields to multi-year peaks overnight.

The dollar hit 115.69 yen before pulling back to last trade about flat at 115.50.

The Aussie added 0.17% to $0.7156, while sterling added 0.07% to $1.3555. — LWTN with Reuters