An individual exchanges US dollars for Philippine pesos at a money changer in Quezon City. — PHILIPPINE STAR/MIGUEL DE GUZMAN

THE PESO inched higher versus the dollar on Wednesday after moving in a tight range as the market stayed on edge while waiting for developments in the Middle East.

The currency closed at P61.74 a dollar, gaining a centavo from Tuesday’s record-low finish of P61.75, according to Bankers Association of the Philippines data posted on its website.

The local unit opened Wednesday’s session stronger at P61.73 per dollar. It traded within a narrow range as its intraday best was at just P61.67 against the greenback, while its weakest showing was at P61.75.

Dollars traded rose to $1.54 billion from $1.21 billion in the previous session.

The peso rose a tad as the market was on wait-and-see mode about developments in the Middle East, a trader said by phone.

‘Market players traded generally cautiously awaiting FOMC (Federal Open Market Committee) meeting minutes that will be released overnight,” the trader added.

The peso was broadly steady following the downward correction in global crude oil prices, Rizal Commercial Banking Corp, Chief Economist Michael L. Ricafort said in a Viber message.

He added that the central bank may have intervened during the session again to support the currency.

For Thursday, the trader said the peso may stay rangebound between P61.50 and P61.75 amid a lack of leads, while Mr. Ricafort sees it ranging from P61.55 to P61.75.

The US dollar hit a six-week high on Wednesday as investors came to terms with the possible need for higher interest rates to tackle inflation resulting from the Iran war, Reuters reported.

The uncertainty over when the conflict may end has fanned inflation fears and triggered a global bond sell-off, with the yield on the US 30-year Treasury bond hitting its highest level since 2007.

President Donald J. Trump said the United States may need to strike Iran again but suggested Tehran wants a deal to end the war that has all but closed the key Strait of Hormuz, sending energy prices soaring and roiling markets.

The dollar index, which tracks the currency against six peers, rose 0.1% to its highest since April 7 at 99.47. The index is up more than 1.3% in May due to safe-haven demand and markets pricing in chances of the Federal Reserve hiking interest rates by the end of the year.

Brent crude futures were down 1.1% to $110 per barrel, but remained more than 50% higher than in late February before the war began. — Aaron Michael C. Sy with Reuters

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