THE peso strengthened against the greenback on Wednesday as oil prices slipped on worries of oversupply.

The local unit finished trading at P49.47 per dollar, appreciating by seven centavos from its P49.54 close on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened the session at P49.54 against the dollar. Its weakest was at P49.63 while its intraday best was at P49.46 versus the greenback.

Dollars traded dropped to $760.73 million on Wednesday from the $1.092 billion seen on Tuesday.

The local currency gained on the back of lower oil prices, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“The peso exchange rate closed stronger after the slight decline in global oil prices,” Mr. Ricafort said in a text message.

Reuters reported that pump prices dipped early Wednesday after data showed a buildup in US crude stockpiles bolstered worries on oversupply.

Brent crude futures decreased 10 cents or by 0.2% to $42.98 a barrel by 0417 GMT. Meanwhile, US West Texas Intermediate (WTI) crude futures inched down 12 cents or by 0.3% to $40.50 per barrel.

Meanwhile, a trader said the stronger peso came after remarks from US Federal Reserve officials on the US economy’s recovery.

“The peso strengthened after Fed officials noted that US economic recovery is levelling off as more US states have rolled back their reopening plans,” the trader said in an email.

Reuters reported that Fed officials have expressed worries as the recent surge in infections could take its toll on improving job and consumer spending.

For today, Mr. Ricafort gave a forecast range of P49.35 to P49.55 per dollar while the trader expects the local unit to move within the P49.40 to P49.60 levels. — L.W.T. Noble with Reuters