Peso strengthens as oil prices drop

THE PESO rebounded versus the greenback on Monday as oil prices declined due to concerns over the Omicron coronavirus variant.

The local unit closed at P50.39 per dollar on Monday, gaining four centavos from its P50.43 finish on Friday, data from the Bankers Association of the Philippines showed.

The peso opened Monday’s session at P50.50 per dollar, which was also its worst showing for the day. Meanwhile, its intraday best was at P50.33 against the greenback.

Dollars exchanged dropped to $819.3 million on Monday from $1.15 billion on Friday.

A trader said the peso gained versus the dollar due to the sudden decline in oil prices amid fears over the impact of the Omicron variant on global economic activity.

Bloomberg reported Friday that oil prices dropped by more than 11% on Friday as the market feared the possibility of the return of lockdowns could hurt global demand for oil. On Monday, oil prices recouped some of their losses.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said sentiment was also affected by the government’s national vaccination drive.

The Philippines aims to vaccinate nine million from Nov. 30 to Dec. 1 to put the country closer to its goal of vaccinating 70 million Filipinos by yearend. It has fully vaccinated 40.58% of its population, based on data from the Johns Hopkins University.

Financial markets are closed on Tuesday in observance of Bonifacio Day.

For Wednesday, Mr. Ricafort gave a forecast range of P50.30 to P50.50, while the trader expects the peso to move within P50.30 to P50.55 per dollar. — L.W.T. Noble with Bloomberg