Peso drops vs dollar as tensions deepen
THE PESO weakened versus the greenback on Wednesday as Russia continued to attack Ukraine, which has caused oil supply worries.
The local unit closed at P51.42 per dollar on Wednesday, weaker by 19 centavos from its P51.23 finish on Tuesday, based on data from the Bankers Association of the Philippines.
The peso opened the session weaker at P51.35 versus the dollar. Its worst showing was at P51.455, while its intraday best was at P51.32 against the greenback.
Dollars exchanged increased to $1.032 billion on Wednesday from $942.21 million on Tuesday.
The peso weakened due to safe-haven demand for the dollar amid escalating tensions between Russia and Ukraine, a trader said in an e-mail.
Reuters reported that more than 450,000 people have moved to Poland from Ukraine while 113,000 went to Romania to escape the atrocities caused by the Russian invasion that started last week.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said continued increase in global oil prices due to geopolitical tensions also caused market worries.
Oil prices jumped to their highest since 2014 on Tuesday amid market concerns on oil supply despite the agreement of some economies to release crude reserves.
Brent futures increased by $7 or 7.1% to settle at $104.97 a barrel, the highest close since August 2014. Meanwhile, US West Texas Intermediate crude climbed $7.69 or 8% to $103.41 a barrel, the highest close since July 2014.
For Thursday, both Mr. Ricafort and the trader gave a forecast range of P51.30 to P51.50 versus the dollar. — L.W.T. Noble with Reuters
