THE PESO moved sideways versus the greenback on Tuesday amid inflation concerns as the protracted war between Russia and Ukraine and coronavirus lockdowns in China roil global fuel prices.
The local unit ended trading at P52.32 per dollar on Tuesday, losing five centavos from its P52.27 close on Monday, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s session at P52.32 versus the dollar. Its weakest showing was at P52.39, while its intraday best was at P52.23 against the greenback.
Dollars exchanged declined to $1.02 billion on Tuesday from $1.19 billion on Monday.
“USD/PHP continued to move sideways on Tuesday as dollar supply remained sufficient to meet demand,” Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said in a Viber message.
“Market players are currently monitoring developments that could affect inflation and interest rates in the coming months, like the movement of oil prices, the ongoing conflict in Ukraine, and the lockdowns in China,” Mr. Neri added.
Oil prices were caught between worries over a possible global downturn and the prospect of higher fuel demand from the US summer driving season and Shanghai’s plans to reopen after a two-month coronavirus lockdown, Reuters reported.
US crude eased 66 cents to $109.08 per barrel, while Brent fell 1.14% to $112.14.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the peso weakened slightly after a slight upward correction in the benchmark 10-year US Treasury’s yield and local stock market’s decline.
The yield on 10-year Treasury notes rose 7.7 basis points (bps) to 2.864% after a more than 40-bp decline from a multi-year high of 3.203% set two weeks ago.
On the other hand, the benchmark Philippine Stock Exchange index fell by 110.40 points or 1.65% to close at 6,577.45 on Tuesday, while the broader all shares index retreated by 40.81 points or 0.13% to 3,550.40.
For Wednesday, Mr. Ricafort expects the peso to trade from P52.20 to P52.40 per dollar. — KBT with Reuters