THE PESO inched up against the dollar on Tuesday due to lower global oil prices as well as gains at the local stock market.
The local currency closed at P55.34 versus the dollar on Tuesday, rising by four centavos from Friday’s P55.38 finish, data from the Bankers Association of the Philippines’ website showed.
The local unit opened Tuesday’s session weaker at P55.48 per dollar. Its worst showing for the day was at P55.50, while its intraday best was at P55.26 versus the greenback.
Dollars traded went down to $1.057 billion on Tuesday from the $1.24 billion recorded on Friday.
The local currency was supported by a drop in global crude oil prices and the Philippine Stock Exchange index’s (PSEi) rise, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Oil prices fell in Asian trade on Tuesday, extending losses seen in the previous session, as weak economic data from China and expectations of a US interest rate increase weigh on the market.
Brent crude was down 0.3% or 24 cents to $79.07 a barrel by 0615 GMT, while US West Texas Intermediate crude fell 0.3% or 25 cents to $75.41 a barrel. Both benchmarks fell by more than $1 in their last session.
Meanwhile, the PSEi went up by 47.61 points or 0.71% to close at 6,672.69 on Tuesday. The all shares index also gained 14.16 points or 0.4% to end at 3,546.69.
The peso mostly traded sideways with a downward bias amid a lack of catalysts, a trader said in a Viber message.
For Wednesday, the trader said the peso could be supported by expectations of a pause in the Bangko Sentral ng Pilipinas’ (BSP) tightening cycle amid easing inflation.
BSP Governor Felipe M. Medalla said last month that if inflation eased further in April, the Monetary Board could consider pausing its rate hikes at its May 18 meeting.
The central bank has raised borrowing costs by a total of 425 basis points since May 2022.
On Wednesday, the trader sees the peso trading between P55.30 and P55.60 against the dollar, while Mr. Ricafort expects it to move from P55.20 to P55.40. — A.M.C. Sy with Reuters