By Kimani Eros S. Franco

THE PESO declined against the dollar on Friday, dragged by geopolitical tensions between the United States and Iran.

The local currency closes the session yesterday at P52.02 versus the greenback, sixteen centavos weaker than the P51.865 finish on Thursday.

The peso opened the session stronger at P51.9 against the dollar. Its peak for the day stood at P51.845 while its intraday trough settled at P52.025.

Trading volume thinned to $870.39 million from the $919.84 million that changed hands the previous session.

“The peso weakened today due to dollar safe-haven demand amid further heightening of geopolitical tensions abroad,” a trader said.

In particular, the trader referred to the renewed conflicts between the United States and Iran following a bombing on two oil tankers in the Gulf of Oman.

This comes as the US blames Iran for the attacks on two oil tankers in the Gulf of Oman on Thursday, according to a report by Reuters. It was not immediately clear what befell the two oil tankers, which both experienced explosions and forcing the crews to abandon ship. Iran has denied these allegations.

Oil prices rose as much as four percent following this incident, raising concerns on a military confrontation between Tehran and Washington.

For Rizal Commercial Banking Corp. (RCBC) economist Michael L. Ricafort, yesterday’s P52.02 close was “still better” than the P52.04 close last week and is “still among the best levels in a month and… in a year.”

“Despite geopolitical risks in the Middle East involving attacks on two tanker ships at the Gulf of Oman… global oil prices remained among four-month lows and [that] the ten-year US government bond yields eased to 21-month lows at 2.06%,” Mr. Ricafort said in an e-mail.

“Lower oil and US government bond yields are offsetting factors that support the peso,” he added.

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