THE PESO appreciated on Tuesday as oil prices went down amid worries related to the coronavirus’ spread and with investors going profit taking.
The local unit finished trading at P50.75 per dollar on Tuesday, strengthening by 8.50 centavos from its P50.835 close on Monday, according to data from the website of the Bankers’ Association of the Philippines.
The peso opened at P50.90 against the greenback. The peso’s weakest point for the day was at P50.925 a dollar, while its intraday best was at P50.74.
Dollars traded declined to $778.10 million from $787.95 million on Monday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso drew its strength from lower global crude oil prices.
“The peso exchange rate again strengthened, among the strongest in nearly two weeks, amid relatively lower global crude oil prices at three-month lows that reduce the country’s oil imports and narrow the trade deficit,” he said in a text message.
Mr. Ricafort added that the decline in global oil prices were due to “concerns over the adverse effects of the coronavirus in terms of slower economy in China and in other parts of the world.”
Reuters reported that Brent crude inched down by four centavos at $59.28 at around 05:40 GMT. A three-month low of $58.50 was seen last Monday as a global sell-off of riskier assets was triggered by the virus outbreak.
Oil investors are worried about the impact of travel advisories, other restrictions, and any sizable impact on growth in the world’s second-biggest economy and elsewhere may result to lower demand for crude and its products.
The US has already issued warning against travel to China and other countries as death toll related to coronavirus have reached 100 people.
Meanwhile, a trader attributed the local unit’s appreciation to some profit taking.
“The peso appreciated from profit taking by market participants following the latest strengthening of the greenback,” the trader said in an e-mail.
For today, both Mr. Ricafort and the trader said the peso could play around P50.65 to P50.85 per dollar. — L.W.T. Noble with Reuters