Peso drops as war risks persist
THE PESO declined anew versus the dollar on Monday as escalating tensions in the Strait of Hormuz despite the ceasefire between the United States and Iran pushed up global oil prices.
The currency closed at P61.565 a dollar, weakening by eight centavos from its P61.485 finish on Thursday, according to Bankers Association of the Philippines data posted on its website.
This is just a tad stronger than the peso’s record-low close of P61.567 on April 29.
The local unit opened Monday’s session slightly stronger at P61.42 against the greenback and reached an intraday best of P61.32. Meanwhile, its worst showing was at P61.62.
Dollars traded fell to $1.22 billion on Monday from $2.487 billion on Thursday.
The peso sank on safe-haven dollar demand as the US and Iran exchanged fresh threats, a trader said in a phone interview.
There was some resistance at the P61.60 level, likely due to potential intervention from the central bank, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted in a Viber message.
For Tuesday, the trader expects the peso to range from P61.20 to P61.70 per dollar as markets continue to watch developments in the Middle East and await the release of key US jobs data.
Meanwhile, Mr. Ricafort said the currency could move between P61.45 and P61.65.
Markets remained cautious at the start of the trading week after US President Donald J. Trump said they would start an effort on Monday morning to free ships stranded in the Strait of Hormuz as a “humanitarian gesture” to aid neutral countries in the US-Israeli war with Iran, Reuters reported.
Iran warned the US Navy not to enter the Strait of Hormuz, saying it would “respond harshly” to any threat.
The US dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.1% at 98.264. — A.M.C. Sy
