Peso rebounds as oil prices drop
THE PESO bounced back versus the greenback on Tuesday as oil prices eased and with the new alert level system first implemented in Metro Manila set to be expanded to more areas.
The local unit ended trading at P50.72 per dollar on Tuesday, stronger by 12 centavos from its P50.84 close on Monday, based on data from the Bankers Association of the Philippines.
The peso opened Tuesday’s session slightly stronger at P50.82 per dollar. Its weakest showing was at P50.86, while its intraday best was at P50.68 against the greenback.
Dollars exchanged rose to $999 million on Tuesday from $829.49 million on Monday.
The peso strengthened against the dollar following a slight easing in international oil prices, a trader said in an e-mail.
Reuters reported Monday that oil prices went down after touching multi-year highs as US industrial output fell.
Brent crude oil futures slipped 53 cents or 0.6% at $84.33 per barrel. On the other hand, US West Texas Intermediate crude settled 16 cents higher or 0.19% at $82.44 a barrel.
The government’s decision to implement the alert level system in other regions starting Wednesday also boosted the peso, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
Presidential Spokesperson Herminio “Harry” L. Roque, Jr. said 14 provinces and five other cities will be placed under the alert level system, which was first implemented in Metro Manila, amid a decline in the daily coronavirus case tally as well as the improving vaccination rate.
Infections rose by 4,496 on Tuesday, bringing the country’s active cases to 63,637, based on data from the Department of Health.
The Philippines has fully vaccinated 22.48% or 24.307 million of its population, according to latest data from the Johns Hopkins University.
For Wednesday, Mr. Ricafort gave a forecast range of P50.65 to P50.85, while the trader expects the local unit to move within P50.55 to P50.80 against the dollar.
The dollar retreated on Tuesday to a three-week low, hit by a proliferation in rate hike bets in other markets and by improved sentiment that lifted equities and risk-sensitive currencies such as the Australian dollar, Reuters reported.
A robust start to the US earnings season and hopes China will be able to contain its property market malaise boosted global stock markets and some currencies.
The dollar index, which measures the greenback against six peers, sank as low as 93.58 for the first time since Sept. 28, before inching up to 93.616, 0.35% down on the day. — L.W.T. Noble with Reuters
